Clico group optimistic, proposals will fix problem without taxpayers $$

The head of the Clico Policyholders Group (CPG) said Tuesday is encouraged by its meeting with an inter-ministerial team, noting that it presented two "very crucial proposals" to the Government on Monday.

In a media release Peter Permell said one of the proposals will satisfy the guarantees made to policyholders "without causing financial stress" on the economy.

The leader of the government team, Food Production Minister Vasant Bharath, met with the Clico group Monday. The two sides plan to meet again on Friday, the release said.

"We are pleased to report that our meeting with the Cabinet-appointed Inter-Ministerial Committee last evening (Monday) went well. In fact, I am almost tempted to say a little better than expected but I will not. Accordingly, we remain cautiously optimistic," the release said.

Permell said the first proposal to the government relates to the speedy resumption of interest payments on all 'non-traditional' or EFPA policies based on prevailing market rates.

"Secondly, we proposed a very technically sound but creative financing mechanism which would satisfy the guarantees made to policyholders by both the Government and the Central Bank on January 30, 2009 without increasing the country's annual budget deficit, the debt to GDP ratio, the current TTD liquidity overhang and/or placing any additional pressure on the USD exchange rate," he said.

Permell said his group understands the economic constraints facing the Government and offered a way to deal with the issues without funding from government sources. He said both sides "have agreed that the details of these discussions and the proposals should remain confidential in the interim."

Pernell confirmed that at Friday's meeting the discussions will include a team of foreign experts, who have volunteered to work with the Clico group.