A
alexk
Guest
“Unfounded” and “baseless”.
That is how Finance Minister Colm Imbert described Opposition Leader Kamla Persad-Bissessar’s accusations that the National Investment Fund Holding Company (NIF) was illegal.
At an impromptu media conference at his Port-of-Spain office yesterday, Imbert blasted Persad-Bissessar for her condemnation and allegation that insurance companies’ investment in the NIF was unlawful.
“It is a figment of the Leader of the Opposition’s imagination,” Imbert said.
He confirmed that although the new Insurance Act does place a 25 per cent total capital limit on how much an insurance company may invest, it is yet to be proclaimed and there is a three-year transitional period.
“It is impossible, wrong, false, misleading and very unfortunate that she attempts to undermine the success of the Ministry of Finance,” Imbert said.
“I heard the Opposition Leader saying that the Government, through mischief or incompetence or ineptitude or just plain bad-mind, I guess, have encouraged insurance companies to break the law and to exceed limit allowed for a single investment in a financial instrument of this nature. I wish to reject that in its entirety.”
Speaking at the United National Congress’ (UNC) Monday Night Forum in Chaguanas on Monday night, Persad-Bissessar questioned the legitimacy of the insurance companies investing large sums into the Government’s NIF Holding Company. Persad-Bissessar also called on Imbert to say if financial institutions, among them insurance companies and credit unions, may be in violation of the new Insurance Act 2018 by purchasing the bonds.
Addressing Persad-Bissessar’s claims yesterday, however, Imbert said: “I don’t know if she is unhappy with the success of the NIF, I don’t know what the problem is. What I do know is that she is wrong in everything that she says.”
Imbert said Persad-Bissessar had also initially labelled the NIF as a Ponzi scheme which was also incorrect as the NIF was backed by billions of dollars in assets.
“That was a nonsense statement in the beginning, now I see the Opposition Leader is coming after the tremendous success of the NIF, beyond people’s wildest imaginations, to say that it is a breach of the law. That also is not true,” he said.
He said in the current Insurance Act there is no stipulated amount that a company can invest. He said he piloted a new Insurance Act, which has not yet been proclaimed, which sets a limit at 25 per cent of the capital of the insurance company.
“So when the new law comes in insurance companies will be allowed to only invest 25 per cent of their capital. But because its brand new, the law gives insurance companies a transition period of three years to put their house in order.
So even if and when we proclaim the Insurance Act, which the plan is to do so by the end of this year, when that comes into force insurance companies will have until 2021 to make whatever arrangements they have to make,” he said.
Imbert said insurance companies had requested an increase from 25 per cent to 50 per cent once the investment opportunity is offered by a wholesome and trusted company. He said that the Cabinet Note which Persad-Bissessar referred to on Monday night was one to seek Cabinet approval to increase that limit.
“It is not after the fact as the Leader of the Opposition alleged, it is long before the three-year deadline expires in December 2021,” he said.
But he said all the explanation was irrelevant because of the oversubscription of the NIF.
“There is no insurance company that is investing more than 25 per cent,” he said.
Over the weekend, Imbert sent out a series of tweets boasting of the success of the NIF, saying it had been oversubscribed by 50 per cent. He gave more details of the bond success yesterday to defend against Opposition criticism.
“The total is $7.35 billion, which is equivalent to an over-subscription of 82 per cent. On that basis alone the NIF bond was a tremendous success,” he said.
The NIF is broken down into three tranches - five, 12 and 20 years - at differing fixed rates.
“For the five-year, the application or subscription as it is called is $2.17 billion, the 12-year $1.6 billion and the 20-year $3.56 billion,” Imbert said.
NIF INVESTORS
Pension funds $828 million
Credit unions $251 million
Mutual funds $1.2 billion
Insurance companies $2.1 billion
Other $1.1 billion
National Insurance Board $1 billion