The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

CLICO (Bahamas) liquidator is aiming to secure a pre-Christmas deal to outsource management of its remaining insurance portfolio to BAF Financial.

Basil Christie, head of the insolvent insurer's creditors' committee, yesterday confirmed to Tribune Business that the information it had received on the proposed management outsourcing was "correct".

This newspaper was informed by sources familiar with the transaction that Craig A 'Tony' Gomez, the Baker Tilly Gomez partner and CLICO (Bahamas) liquidator, had already agreed terms with BAF Financial, which is owned by Chester Cooper, the Exuma MP, and attorney John Wilson.

The deal is now being reviewed by industry regulator, the Insurance Commission of the Bahamas, with further sign-offs required by the creditors committee and Supreme Court before it is consummated. "They're aiming for the management of the portfolio to be transferred from the liquidator to BAF before year-end," one source familiar with the deal told Tribune Business.

"The parties have agreed to terms, they have a draft document, and it's at the Insurance Commission. It then has to be shared with the creditors committee, and if there are no issues it will then be on its way to the Supreme Court."

This newspaper was also informed that previous plans to create a new insurer, Coral Insurance Company, had been abandoned by both the Government and liquidator.

The proposal, conceived under the former Christie administration, was to establish Coral as a special purpose vehicle (SPV) that would have been licensed by the Insurance Commission and used to hold CLICO (Bahamas) remaining in-force insurance policies until they could be sold to a buyer.

Coral was supposed to have been created by the second week of November 2016, but Tribune Business sources confirmed that the plan had been "shelved" in favour of the management outsourcing with BAF Financial.

"That plan with Coral Insurance was cancelled, put on the shelf and will not be used any more," one well-placed source told this newspaper.

However, Mr Gomez's ultimate goal is to sell CLICO (Bahamas) remaining insurance portfolio to another Bahamian life and health insurer, which may not necessarily be BAF Financial.

While that group is understood to be interested in an acquisition, Tribune Business was told that it has competition from BISX-listed rival, Family Guardian.

"It could easily be Family Guardian, who have expressed an interest," one contact said. "The liquidator will shortly be looking to sell, once the Government determines how they're going to fund it and what type of instrument they're going to use."

The Government has to facilitate the insurance portfolio's sale by filling the 'insolvency hole', or deficiency of assets versus liabilities, which prompted the life and health insurer's collapse into liquidation in early 2009. The options open to the Minnis administration include guarantees, promissory notes and bonds.

Mr Gomez still remains 'gagged' by the Supreme Court from speaking publicly, even though it is now almost nine years since CLICO (Bahamas) was placed into liquidation under the latter's supervision.

However, Mr Christie confirmed the developments outlined to Tribune Business, including the management agreement talks with BAF Financial; the abandoning of the Coral Insurance Company plan; and the end-goal of selling CLICO (Bahamas) remaining insurance policies.

"There were three parties involved, Colina, BAF and Family Guardian, and negotiations were taking place," he told this newspaper. "Government was to have taken over the portfolio initially and created Coral to manage it, but since then they've dismissed that. Right now, they're looking for a company to manage that portfolio.

"We're encouraged. We feel the liquidators are doing their part satisfactorily, and the Government is co-operating to our expectations and satisfaction."

Mr Christie said the creditors committee also understood there was "a strong likelihood" that a third payout may be made to CLICO (Bahamas) former annuity and pension customers prior to year-end.

"We understand there's a strong likelihood there will be a third payout before the end of the year," he added. "The contingency there is the availability of funds, and we understand the limits on the Government side, but the intention is there."

The Government was three months' late making the second payout, which occurred in late October rather than July as originally intended. The third was due to be made last month in November, but the previous delay is likely to push this back.