The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An outspoken CLICO (Bahamas) policyholder yesterday warned the Government it will “make a serious mistake” if it allows the imminent general election to interfere with fulfilling its compensation pledges to Bahamians.

Bishop Simeon Hall, himself one of the insolvent insurer’s victims, urged the Christie administration “to make good on its promise” over the second - and final - payout to former policy and annuity holders.

The Government unveiled its proposed resolution in early October, with promises of payment by November, but this has yet to happen some four months later.

“The Ministry of Finance will be making a serious mistake if they allow the election to come without some resolution to this matter,” Bishop Hall told Tribune Business.

“I understand some good progress has been made, but by now I would have expected this thing to be resolved.”

CLICO (Bahamas) was placed into Supreme Court-supervised liquidation more than eight years ago in February 2009, and amid an ongoing general election campaign and other policy priorities, Bishop Hall is concerned that he and other victims may be forgotten once again.

“I want to encourage the Government to make good on its promise,” he said, “and to do more for the more than 10,000 persons affected by this.

“Whatever they do, they should follow the Biblical injunction Jesus told his disciples: ‘Whatever thoust do, do quickly’.”

The second phase payout to former CLICO (Bahamas) clients is supposed to be triggered by the creation of a new insurance entity, a special purpose vehicle (SPV) to be called Coral Insurance Company. This is being formed to hold CLICO (Bahamas) insurance policies that remain in effect.

The SPV, which will be licensed and regulated by the Insurance Commission of the Bahamas (ICB), was supposed to be set up by the second week of November 2016, and hold the remaining insurance portfolio until it is purchased by another insurer.

Tribune Business sources yesterday suggested that CLICO (Bahamas) liquidator, Craig A. ‘Tony’ Gomez, the Baker Tilly Gomez managing partner, and others have been working to develop a feasible business plan for Coral Insurance Company.

However, before the plan and Coral’s formation can proceed any further, Tribune Business understands that the Government has to determine how to structure the financial support it will provide to Coral.

Several sources familiar with developments suggested that progress on this issue had slowed down recently on the Government side, thereby delaying the promised payout and likely leading to Bishop Hall’s renewed concern.

The Government has agreed to provide “capital support” to plug the holes in Coral’s original balance sheet, and cover the ‘gap’ between its asset and policy liabilities that will be inherited from CLICO (Bahamas) and the liquidator.

This will likely take the form of a promissory note, and the Government (taxpayer) will also cover any annual operating deficits incurred by Coral. It is the structuring of these requirements that now needs to be concluded.

This will pave the way for completion of Coral’s business plan, and its licensing and creation. This, in turn, will lead to the $45 million bond issue that will compensate CLICO (Bahamas) former Executive Flexible Premium Annuity (EFPA) holders and those who surrendered their pension policies.

The bond issue, as previously revealed by Tribune Business, will be handled by Leno Corporate Services. The bonds will be issued in exchange for, and replace, the pledges issued to former CLICO (Bahamas) clients owed more than $10,000, and who received their first cash payments in February 2016. That collective payment totalled some $13.1 million.