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CLICO’s T&T woes have no impact on Guyana – says local CEO

Jan 31, 2009 News

Finance Minister Dr. Ashni Singh met with the Chief Executive Officer of Colonial Life and General Insurance Company (CLICO) Guyana, Mrs. Geeta Singh-Knight, and the Commissioner of Insurance, Mrs. Maria van Beek, yesterday afternoon, further to developments within the CLICO group, reported in the Trinidad media earlier in the day.

CLICO Investment Bank (CIB) in Trinidad was yesterday sold to Trinidad and Tobago’s First Citizens Bank Limited, with the administration providing liquidity to support any strain on the insurance company.

Minister Ashni Singh summoned the meeting for the purpose of ascertaining the extent of exposure, if any, of the local company to the events in Trinidad and Tobago.

Mrs. Singh-Knight confirmed that through the intervention of the Central Bank of Trinidad and Tobago and the parent company, CL Financial, CLICO Investment Bank (CIB) will be sold.

The liabilities of CIB will be acquired by First Citizens, another Trinidadian bank. This was a result of a combination of factors, including the falling oil and other commodity prices and the significant exposure of CIB to this sector, the Trinidad Central Bank reported.

Further, another subsidiary of the Group, CLICO Trinidad, which is an insurance company, has been extended credit by the Central Bank through assets secured from the parent company, CL Financial, in the event that further liquidity is required.

The Guyana company, which is also a wholly owned subsidiary of CL Financial, has assured the Minister of Finance that these developments do not affect its operations adversely, as it has no investments or dealings with sister companies CIB or CLICO (Trinidad).

Minister Singh requested that the company supply to the Commissioner of Insurance, by Monday, further information on the financial status of the Group, details of the transaction agreed with the authorities in Trinidad and Tobago, and of the implications of these developments for the operations of the Group as a whole and the Guyana company in particular.

CLICO (Guyana) issued a press release on the matter yesterday afternoon. In that release, the insurance company stated that it is a separate entity within the CL Financial Group, and none of its assets are intertwined with CLICO (Trinidad) and CLICO Investment Bank.

It also noted that CLICO Guyana remains solid, with a statutory fund that is in good standing.

During the Central Bank press conference, yesterday in Port-of-Spain, it was stated that the financial condition of CLICO in Trinidad has caused some concern to shareholders and depositors, who had pointed out that this can cause possible disruption to the Trinidad and Tobago financial system.

The Governor of the Bank stated that the sharp decline of methanol prices affected CLICO.

He noted that the real estate and other problems in the country and the current financial crisis throughout the world also affected the company.

The Bank Governor boasted of the tremendous strength of the financial system of T&T.

CLICO owns over 50 percent of the shares of Republic Bank in Trinidad.

 

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