NASSAU, Bahamas, CMC – The Bahamas government says the insolvent Colonial Life Insurance Company (CLICO) liquidator is proposing to declare payments shortly.
“We have been made aware that there has been a settlement with the liquidators and the Trinidadian government or authorities that would make the CLICO policyholders whole. The issue we have at the moment is getting the liquidator present to sit down so that we can resolve these things,” Prime Minister Phillip Davis told Parliament.
Last year, the CLICO (Bahamas) liquidator was given the authority to accept a US$110.827 million settlement that could fully repay all debts owed to policyholders, creditors, and the government.
Chief Justice Sir Ian Winder, in what had been hailed as a potential “quantum leap forward” for the policyholders, gave Craig A. ‘Tony’ Gomez, the Baker Tilly Gomez accountant and principal, the go-ahead to accept the sum offered by liquidators for its Trinidad-based parent, CL Financial.
“The official liquidator be at liberty to accept the amount of US$110.827m adjudicated by the official liquidators of CL Financial on CLICO (Bahamas) proof of debt filed on May 16, 2018, in CL Financial’s liquidation,” the Chief Justice wrote in a July 24, 2023, Order filed with the Supreme Court.
The figure represents the settlement of the CLICO (Bahamas) claim against its Trinidadian parent. CL Financial had guaranteed US$58 million, or 79.5 percent, of the monies its Bahamian subsidiary had advanced to another group entity, CLICO Enterprises, which subsequently defaulted on the loan repayments.
Davis, responding to a question from opposition legislator Shanendon Cartwright about when the CLICO policyholders would be paid, said, “I’m advised that the liquidator is proposing to declare payments shortly.
“Where we are and what government has paid out, the government would be entitled to receive their share of what’s been paid back to the liquidator and then ensure that the policy owners get what is due to them. So that’s why, knowing that the funds are available from the rightful source, we did not need to budget for it,” Davis told legislators.
But Cartwright asked why the government pays the CLICO policyholders now and then receives the funds from the liquidator, who has promised payment and would have directed Baker Tilly (Gomez) to accept. There is still the issue of when that money will be available. We don’t know when that money will come, so why doesn’t the government stand in the gap?
Cartwright said that each of the policyholders would have executed an assignment of their dividends to the government “so that when the monies come in, the government would be repaid anyway.
“So why not pay the policyholders in the meantime, particularly since the government is going to get the money, because right now, about 10,000 of them feel as though the government has abandoned them on this issue.”
But Prime Minister Davis said he was surprised that the 10,000 policyholders would believe they had been abandoned.
“We believe these funds are readily available, and they should be readily available. I don’t want to say what steps the government will take to ensure they’re readily available.
“But I know that the financial secretary was given some specific instructions by me last week concerning getting the liquidators’ attention to resolve this matter immediately.
“But in any event, we have not abandoned them. We have not budgeted, and the government will step in if there’s a need to step in, but we don’t see that need right now. We will step in to ensure the liquidator does his job and discharges his job appropriately. And that’s what we will wait for.,” Davis told legislators.
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