Richard Lord

The Gov­ern­ment is mov­ing to cross the fi­nal par­lia­men­tary hur­dle in or­der to is­sue pay­ments to Cli­co pol­i­cy­hold­ers as Fi­nance Min­is­ter Win­ston Dook­er­an is ex­pect­ed to present two bills for de­bate in the House of Rep­re­sen­ta­tives on Wednes­day. One bill seeks to buy out cer­tain rights held by Cli­co and British Amer­i­can In­sur­ance pol­i­cy­hold­ers, while the oth­er seeks to pre­vent pol­i­cy­hold­ers from start­ing or con­tin­u­ing any le­gal ac­tion against the Cen­tral Bank for re­cov­ery of monies.This at­tempt by the Gov­ern­ment to fa­cil­i­tate the re­cov­ery of the in­vest­ments made by thou­sands of lo­cals in the in­sur­ance com­pa­nies, which are owned by CL Fi­nan­cial, comes more than a year af­ter Fi­nance Min­is­ter Win­ston Dook­er­an an­nounced his 20-year, ze­ro-coupon idea in last year's bud­get.

Cli­co and sis­ter com­pa­ny British Amer­i­can In­sur­ance col­lapsed in Jan­u­ary 2009 with Cli­co re­ceiv­ing a $5.1 bil­lion bailout from the Gov­ern­ment be­tween Feb­ru­ary 2009 and May 2010. Pol­i­cy­hold­er groups have com­plained about the lack of con­sul­ta­tion and length of time it has tak­en the Gov­ern­ment to ta­ble a con­crete pro­pos­al for those with in­vest­ments of more than $75,000 in Cli­co. De­bate on the Cen­tral Bank (Amend­ment) Bill and the Pur­chase of Cer­tain Rights and Val­i­da­tion Bill 2011is ex­pect­ed to be­gin on Wednes­day. The Pur­chase of Cer­tain Rights and Val­i­da­tion Bill 2011 seeks to "pro­vide for the pur­chase of cer­tain rights" of the hold­ers of short-term in­vest­ment prod­ucts is­sued by Colo­nial Life In­sur­ance Com­pa­ny (Trinidad) Ltd and British Amer­i­can In­sur­ance Co.

Short-term in­vest­ment prod­ucts re­fer to Ex­ec­u­tive Flex­i­ble Pre­mi­um An­nu­ity, Ex­ec­u­tive Sin­gle Pre­mi­um An­nu­ity, Group Ad­vanced Pro­tec­tion or Guar­an­teed An­nu­ity Ad­vanced Pro­tec­tion Pol­i­cy is­sued by Cli­co. The prod­ucts cov­ered by British Amer­i­can are Ex­ec­u­tive Flex­i­ble Pre­mi­um An­nu­ity Sin­gle Pre­mi­um An­nu­ity, Cor­po­rate Sav­ings Con­tract and the Flex­i­ble Pre­mi­um An­nu­ity II. If the leg­is­la­tion is passed in­to law, the pay­ment of all monies un­der the Act will be­come a charge on the Con­sol­i­dat­ed Fund. The bill al­so sees to "em­pow­er the Min­is­ter of Fi­nance to make pay­ments and is­sue bonds for the pur­chase of those rights; to val­i­date fund­ing pro­vid­ed by Gov­ern­ment to Colo­nial Life In­sur­ance Co (Trinidad) Ltd and British Amer­i­can In­sur­ance Co (Trinidad) Ltd; and re­lat­ed mat­ters," the ex­plana­to­ry note to the bill stat­ed.

The leg­is­la­tion pro­vides for the min­is­ter to "sign agree­ments, make pay­ments and is­sue bonds." The bill al­so pro­vides for the min­is­ter to "is­sue 20 bonds of vary­ing ma­tu­ri­ties from one to 20 years and which shall not ex­ceed in the ag­gre­gate $10.7 bil­lion, af­ter which he may is­sue ad­di­tion­al bonds." The bill pro­vides for the es­tab­lish­ment of a fis­cal agent to set up and main­tain a reg­is­ter of the bond­hold­ers and prompt­ly pay the sum up­on ma­tu­ri­ty of the bond. The Cen­tral Bank (Amend­ment) Bill amends Sec­tion 44E of the Act. The Bill states:

• No cred­i­tor, share­hold­er, de­pos­i­tor, pol­i­cy­hold­er or any oth­er per­son shall have any rem­e­dy against the in­sti­tu­tion in re­spect of any claim.

• No cred­i­tor, share­hold­er, de­pos­i­tor, pol­i­cy­hold­er or any oth­er per­son shall com­mence or con­tin­ue any ac­tion, ex­e­cu­tion or oth­er pro­ceed­ings or seek to en­force in any way what­so­ev­er with­out lim­i­ta­tion in Trinidad and To­ba­go, any judg­ment or or­der ob­tained in Trinidad and To­ba­go or any oth­er ju­ris­dic­tion against the in­sti­tu­tion or its suc­ces­sor or its trans­fer­ee of the whole or any part of any prop­er­ty, as­sets or un­der­tak­ing of the in­sti­tu­tion for the re­cov­ery of any claim or in re­spect of any oth­er li­a­bil­i­ty, un­til the pub­li­ca­tion of a no­ti­fi­ca­tion un­der sec­tion 44G (1) in re­la­tion to the in­sti­tu­tion, or un­til the Bank pub­lish­es a no­ti­fi­ca­tion to lift the stay.

The Bill said that pub­li­ca­tion could be made as soon as:

• the cir­cum­stances no longer pose a se­ri­ous threat to the sta­bil­i­ty of the fi­nan­cial sys­tem, or

• any ap­pro­pri­ate steps to pre­pare for the lift­ing of the stay of pro­ceed­ings have been tak­en by the bank.

The bill al­so seeks to re­duce sys­tem­at­ic risk; fos­ter co-op­er­a­tion with oth­er ju­ris­dic­tions in the de­vel­op­ment of fair and ef­fi­cient cap­i­tal mar­kets; and for oth­er re­lat­ed mat­ters," the bill's ex­plana­to­ry note said. It re­quires a three-fifths ma­jor­i­ty vote for pas­sage. Wednes­day's sit­ting be­gins at 1.30 pm.