Eustace: EC$10m will not be used to assist policy holders

Opposition Leader Arnhim Eustace is of the opinion that the EC$10 million received from Trinidad and Tobago arising from the former National Commercial Bank’s (NCB) investment in CLICO is not going to be used to assist annuity holders who have been adversely affected by the collapse of British American/CLICO.{{more}}

“The Prime Minister responded that funds were fungible and proceeded to indicate that when SVG’s turn came to pay their contribution to any settlement, the government will do so,” Eustace said.

That, according to Eustace, means that the answer is no and that the EC$10 million will be used for some other purpose.

He said that the prime minister had indicated during the Parliamentary session last Monday, March 26, that it was estimated that over US $225 million was invested by citizens throughout the OECS in annuities and that the government of Trinidad and Tobago has contributed US$150 million, and US$75 million will come from the OECS.

This was later changed, however, after it had become clear that Trinidad and Tobago was no longer willing to make such a large contribution and indicated that a sum of $100 million was more likely.

Eustace further explained that the proposals being discussed will give annuity holders who have invested EC$34,200 or less, the face value of their investment, but they will lose their interest.

It was, however, noted that an estimated 70 per cent of the annuity holders fall within this category, which according to Eustace would require US$30 million to satisfy these holders’ needs.

The larger annuity holders, representing the remaining 30 per cent, will require more than US$200 million to meet their needs, he further explained.

These figures represented the face value and would, therefore, mean that these annuity holders would lose a significant portion of their capital, Eustace said.

“All of this must be taken with a great deal of caution since its realization is dependent on the government’s willingness or ability to make payments,” the Leader of the Opposition said.

But in his response to the question in the House, Prime Minister Dr Ralph Gonsalves said whatever money is collected will go into a consolidated fund that will make up this country’s contribution in the event that a payment is required should there be a regional settlement.

“This is not an issue of taking money, it goes to the consolidated fund,” Gonsalves explained.

According to the prime minister, an arrangement was made during the sale of the 51 percent shares of the former NCB that stated that moneys coming in from any British American or CLICO policies will come not to the successor bank, but directly to the government. (DD)