The Gleaner - May 20,
Another slice of Ja to
Guardian Holdings wins portfolios of FINSAC-controlled insurance
TRINIDAD won yet another slice of Jamaican business yesterday.
Insurance giant Guardian Holdings proved the successful bidder for the
Pension and Annuities and the Individual Life portfolios of the three
insurance companies up for divestment by FINSAC, Finance and Planning
Minister Dr. Omar Davies announced in Parliament yesterday.
The Group Life and Health portfolio has gone to First Life Insurance
Detailed negotiations will now begin, the Minister explained.
Dr. Davies said the bid price for the entire portfolio was $1,310.3
million. "Assets amounting to $5.5 billion will need to be
transferred to the purchasers. Of this amount, it is expected that $2
billion could be sourced from the existing assets of Mutual Life, Crown
Eagle and Dyoll and other companies controlled by FINSAC. Negotiations
with the successful bidders will determine the assets which will be
transferred," the Minister said.
He added that the remaining $3.5 billion will be in the form of a
Government debt instrument. "It is proposed that a significant
portion of this instrument be in the form of a 10-year or longer bond
In effect, Guardian and First Life will not actually pay over the sums to
the Government, but reduce the amount of Government debt they will take
over by the amount they have agreed to pay.
Guardian is the latest in a growing list of Trinidad companies
aggressively investing in Jamaica, along with the likes of drinks giant SM
Jaleel, whose Busta brand burst on to the local scene recently. Guardian
is the third major operation headed by leading Trinidad businessman Arthur
Mr. Lok Jack was recently named chairman of Caribbean Cement Limited,
after Trinidad Cement acquired Government's stake in the company. He is
also head of Associated Brands Industries (ABI), which has been
successfully importing Sunshine cereals, Devon biscuits and Holiday
snacks, among others, for years.
Dr. Davies said that in the two-tier strategy which was used in the first
phase, the lump-sum interest-sensitive policies were separated from the
remaining portfolios of the insurance companies and sold separately.
"To date, lump-sum policyholders who have signed the FINSAC agreement
will recover $1.768 billion which they had placed with Mutual Life, Crown
Eagle Life and Dyoll Life."
In the second phase, the Individual Life, Pensions and Annuities, Other
Group and Health portfolios were valued and put to tender. He said
expressions of interest were received from nine companies three local
and six other countries in the Caribbean.
Total liabilities stood at $4.984.7 billion, required capital at $665.2
million and appraisal value at $1.423.1 billion.
Dr. Davies said that predetermined criteria were used to determine minimum
requirements. These included fit and proper, non-receipt of FINSAC support
and the Insurers Capital Adequacy. Based on the criteria, one company was
Those qualifying were Barbados Mutual Life, Blue Cross of Jamaica,
Colonial Life Insurance Company (Trinidad), First Life Insurance Company,
Guardian Holdings Ltd., Life of Barbados Ltd., Maritime Life (Caribbean
Ltd,) and Prime Life. Life of Jamaica is thought to have been asked not to
bid due to its previous FINSAC involvement.
Criteria were set for them and points awarded with the bidders with the
highest points being the winners.
Dr. Davies said that the Supervisor of Insurance for Trinidad and Tobago
indicated that Guardian Life "is one of the leading Health and Life
Insurance Companies in Trinidad, is financially sound and has filed all
the required returns with the Supervisory Authority".
The $8 billion assets remaining with FINSAC would be sold as soon as
suitable buyers are found, and will in time offset the payment of $3.5
billion now being put up by the Government, the Minister said.
He said the assets could not be transferred to the purchasers, as that
would leave them with too high a concentration of assets in real estate,
one of the main factors which led to the demise of Mutual, Dyoll and Crown
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