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Tuesday, June 16, 2009

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Guyana not waiting on CLICO Bahamas resolution By VERNON CLEMENT JONES ~ Guardian Business Editor ~ vernon@nasguard.com: The Guyanese government is stepping aside to allow the sale of CLICO land assets in that country, what it sees as necessary to ensuring policyholders and investors get some of their money back regardless of what's recovered from the Bahamian liquidation. Over the weekend, Guyana Chief Justice Ian Chang confirmed he has approved the immediate sale of properties as the liquidation of the company presses on. The extent and assessed value of the land was not disclosed. Guyana seized CLICO in that country just after CLICO (Bahamas) was ordered into liquidation in February. CLICO (Guyana) had invested some $34 million in CLICO (Bahamas). It's a sum representing 53 percent of its assets. Most of that money is now tied up in Florida real estate, with little indication a forced sale can be completed at this time. Guyana is hopeful that despite the global recession it will in fact be able to attract a buyer for that CLICO landholding in its country. A sale — even at a reduced price — may represent the best chance of insurance policyholders and pension fund investors in the South American nation winning any of that $34m back. The Bahamian ruling sending the CLICO operation here into liquidation means all of the company's assets will be sold to pay off its secured creditors first. They include policyholders and those who've taken out annuities. On the bottom of the list, and despite legal arguments from its counsel, is CLICO Guyana. A promise by Prime Minister Hubert Ingraham that government will offer a guarantee to cover the Bahamian policies is seen as necessary in order to sell the company's book. The offer and its benefits do not, however, appear to extend to Guyana's more than 15,000 policyholders, now awaiting reimbursement. "It is expected that this guarantee would be for a maximum of $30 million and for a period of five years," he said last month. "The guarantee would not apply to policies and annuities of directors and senior management of the company or persons closely related to them; nor would it apply to institutional or corporate policyholders or annuities." Life insurance policies are to be covered up to $300,000 under the government plan. Accident and sickness along with group life, medical and annuity will be covered for the full amount; annuity-gold retirement up to $100,000 of the accumulated value; and annuity-executive flexible premium annuity (EFPA) up to $100,000 of the accumulated value. Monday, June 15,2009