A first reaction to the statements of Central Bank (Jose Jardim)

Recently, there has been a lot of talk in the media about the sale of ENNIA assets such as Banco di Caribe and the property in Mullet Bay, Sint Maarten. This to save the insurance company. Dr. Jose Jardim, as one of the directors of CBCS (Central Bank) stated this at a press conference. Mr. Jardim has expressed himself several times in the same way.

As a professional, I think I have to make some reservations about such statements. CBCS has stated since the emergency regulation on ENNIA was issued that this mainly concerns improving the financial (solvency) position of the insurance company for the benefit of the policyholders.

During the first press conference on 5 July 2018 and the subsequent press conference on 26 September 2018, it was even stated that the process of restoring solvency will not take years. Three years have already passed….

In my humble opinion:

If it concerns the continuity of the ENNIA companies, so actually the so-called saving of ENNIA, why is there even talk of selling ENNIA assets? Under these circumstances, by selling assets, ENNIA obtains less than its assets are actually worth. And what is your alternative use of the obtained resources? Provided you have the continuity of ENNIA in mind, you will have to have a better reinvestment with sufficient return to be able to meet your obligations in the long term. Or there is a liquidity issue and you need cash to meet short-term obligations and possibly continue with help. Then ENNIA is in deep trouble.

In the case of the sale of Banco di Caribe for a price mentioned in the various media of around 60 million, ENNIA has an issue. According to the recently published annual accounts 2020, approved by the CBCS, Banco di Caribe's equity is 182.4 million. Banco di Caribe still generates a profit which can be considered a return for ENNIA. What reason can you have to sell at a discount of 120 million? Such a transaction is not in line with an intention to ensure the continuity of ENNIA for the benefit of the policyholders.

It only makes sense if you intend to settle the whole thing. Then you need cash to buy everything off at probably a discount. But then you must not pretend that your intention is to save ENNIA and ensure continuity. This is then misleading policyholders and the public. Under these circumstances, every guilder put into his pension by a policyholder will be worth maybe 30 cents immediately if I keep the proportions for Banco di Caribe. In any case, worth much less. If it takes a long time to clarify what the intention is and to act on this, ENNIA will have the same fate as Girobank but with a greater impact.

The same applies to the land in Mullet Bay, Sint Maarten. A life insurer or a pension provider should also consider long-term investments. Because you also have long-term obligations (sometimes of 40 years or longer). Around the world, these insurers will also invest in land that will be developed over the years.

On Curacao we can even compare with APNA/APC who had acquired the land on Jan Thiel and sold the land by parceling out little by little in phases. That is also how the investment in Mulletbay should be seen. Instead of developing the territory only selling below the possible realizable value, you have lied to the policyholders again. The value of their pension will decrease accordingly.

How is it possible that the CBCS advocates the sale of assets, i.e., an erosion of the value of the group, and at the same time claims to represent the interests of policyholders.

In any case, CBCS has caused unrest among policyholders and the public in general. Under no circumstances will the sale of assets for less than their book value and without a more favorable alternative use be a responsible business. Only in the event of settlement does the sale make any sense, but it will seriously affect the assets of policyholders.


Reinald Curiel is a former board member of insurance company ENNIA.

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