The Tribune

By NEIL HARTNELL

Tribune Business Editor

COLINA Insurance Company has dropped its interest in acquiring CLICO (Bahamas) policy portfolio, Tribune Business can reveal, due to concerns over whether supporting back office data could be successfully obtained from the insolvent insurer's Trinidadian affiliate.

The withdrawal by Colina Insurance Company, the 100 per cent affiliate of BISX-listed Colina Holdings (Bahamas), is effectively confirmed in the latest report to the Supreme Court by CLICO (Bahamas) liquidator, Craig A. 'Tony' Gomez.

Although the Baker Tilly Gomez accountant and partner does not identify Colina Insurance Company by name, Tribune Business sources in the insurance sector - and close to the liquidation - confirmed that the life and health insurer had been the long-standing front-runner to acquire CLICO (Bahamas) life and health insurance business, plus pension portfolio, until it pulled out earlier this year.

"On January 10, 2012, I received a letter from the prospective buyer advising me that they are no longer interested in acquiring CLICO's life, health and pension policies," Mr Gomez wrote in his report.

"This decision was primarily based on the proposed buyer's uncertainty that CLICO's policy data could not be successfully migrated from CLICO Trinidad's system by February 28, 2012, as requested of the liquidator by CLICO Trinidad."

In fact, Mr Gomez's report subsequently discloses that CLICO (Bahamas) data was migrated from Trinidad to its new system, hosted in Florida by United Software Systems and Software Inc (USSI), on February 20, 2012.

Still, despite Colina Insurance Company's withdrawal, Tribune Business understands that Mr Gomez still has options for purchasers of CLICO (Bahamas) insurance policy and pension portfolio.

While there is also thought to be international interest, sources suggested to local players still in the race are Family Guardian, the life and health insurance subsidiary of BISX-listed FamGuard, and Scotiabank (Bahamas).

The latter would be a particularly intriguing party, given the recent controversy surrounding its group homeowners insurance programme, at least among some members of the industry. Scotiabank has long been keen to get into the Bahamian insurance market, especially given that its two Canadian banking rivals, Royal Bank of Canada and CIBC FirstCaribbean, both have agent/broker licences.

Indeed, Mr Gomez's report to the Supreme Court, covering the period January 1-March 31, 2012, mentioned a meeting with the Insurance Commission of the Bahamas (ICB) on March 7 this year to update them "on the transfer of the portfolio to the interested in buyer". That confirms other parties remain interested, despite Colina's exit.

However, Tribune Business understands that no potential CLICO (Bahamas) portfolio purchaser will consummate their interest until the Government finally delivers on its long-made promise to provide a $30 million guarantee. It is understood this has yet to be drafted by the Attorney General's Office.

While the Government would be reimbursed with funds raised from the sale of CLICO (Bahamas) assets, Mr Gomez said in his latest report: "The guarantee is being drafted by the Office of the Attorney General and I am continuing my follow-ups with the AG's Office on the status of this document. As at the date of this report [March 31, 2012], I still await a first draft of the guarantee."

CLICO (Bahamas) policy portfolio, as at March 31, 2012, consisted of a total 14,988 policies with a collective surrender value of $19.67 million and total sum assured of $1.174 billion.

Elsewhere, Mr Gomez said that at end-March 2012, CLICO (Bahamas) policyholders and creditors faced a net solvency deficiency of $22.987 million, meaning that assets of $43.923 million were insufficient to cover $66.91 million in liabilities.