The Trinidad and Tobago government said on Thursday there is no easy way to solve the problems facing Colonial Life Insurance Company (CLICO), the CL Financial subsidiary that is currently owing policy holders about TT$17 billion.CLICO has been in serious financial trouble and is facing intense pressure from policy holders who fear that they may not get their money despite a $5 billion rescue package provided to its parent company by the government of Trinidad and Tobago.
The bailout of the conglomerate has been through cash and bonds.
On Wednesday, Governor of the Central Bank of Trinidad and Tobago, Ewart Williams, told reporters if the pressure from investors continues there a risk that the company could be forced into liquidation, leading to a dramatic fall in value the dollar value of the funds.
Read the story: Hold strain CB gov. tells CLICO policyholders
On Thursday, Finance Minister Karen Nunez-Tesheira, told reporters the government rfemains committed to the rescuing CL Financial, noting that the company accounts for at least 30 per cent of Gross Domestic Product (GDP) of the country.
Its collapse would send shock waves through the entire economy, she predicted.
“We are not retracting from that. We understand the responsibility that we undertook. All we are saying at this point in time is that if one expects a quick fix to what is a huge issue that is not being reasonable.
“We are saying we are committed to doing it, the government has made the liquidity investment and the government is going to continue to work through with the Central Bank who has the jurisdiction over CLICO to work through with a response consistent with our undertaking.
“We are not back-tracking on anything we are committed to doing what we have said, but it is a huge undertaking,” she told reporters.
The Finance Minister said that the role of the government in the entire issue is one of working with the Central Bank and “of course being the funder of that bail out, we must be involved in it."
She added, “I want to be very clear, the reason why we are being very careful…is that I am aware of the role of each of us under the legislation."
She said that when the government entered into the CLICO matter in January last year “we were working into something to which you had to be going into a fact finding mission and it was a huge undertaking”.
CLICO’s acting chief executive, Carolyn John, has insisted the company would meet the payment schedules.
She told reporters the company has settled accounts with most customers whose policies matured up to the end of 2009 and whose policies were under TT$50,000. She said the others will be settled within three weeks.
She said concerns of customers with policies up to TT$100,000 will be addressed by March 31 and those whose policies amount to more than TT$100,000 get their money in monthly instalments.
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