Central Bank reports progress made on restructuring ENNIA

      Central Bank reports progress  made on restructuring ENNIA

The ENNIA office on W.J.A. Nisbeth Road.

WILLEMSTAD/PHILIPSBURG--It will not be necessary to await the outcome of pending court proceedings to press on with the restructuring of ENNIA to ensure the continuity of the insurance company, Central Bank of Curaçao and St. Maarten (CBCS) interim president Jose Jardim stated during Thursday’s presentation of the Central Bank’s 2019 annual report.

  Jardim also announced the appointment of a new management team at ENNIA, headed by Lesley-Ann Brodie as chief executive officer, as of this week.

  An emergency measure regarding several companies of the ENNIA Group was issued in July 2018, at the request of the Central Bank. The aim of the emergency measure is to achieve a restructuring of ENNIA to restore its solvency, also in view of ENNIA’s long-term obligations to its policyholders.

  During the presentation of the 2019 report, Jardim gave an update on the steps that have been taken in this regard.

  “Immediately after the emergency measure came into force, the CBCS, together with ENNIA, identified all possible solutions to the solvency deficit, also carrying out a feasibility study. In collaboration with its advisors, the CBCS included the most concrete and feasible of these options in a restructuring plan that is already partly being implemented,” CBCS’ vice president said.

  “For instance, large sums of funds and investments previously on US bank accounts have been returned to the insurance company’s control and preparatory steps are being taken towards a more transparent and less risky structure for the group. In several areas, the relevant components of ENNIA are now more loosely connected and, unlike the situation before the emergency regulation, the insurer’s actual capital position and risk profile can now be clearly assessed.”

  In the coming time, efforts will continue towards a step-by-step adjustment of ENNIA’s corporate structure and a gradual lifting of the emergency measure.

  “These restructuring efforts will also continue after the gradual lifting of the emergency measure has begun. The aim is to safeguard the interests of ENNIA’s policyholders and those of other creditors, while ensuring its continuity. As soon as more details can be released on the progress of the restructuring efforts, the CBCS will share these,” Jardim said.

  ENNIA initiated legal proceedings in October 2019 against several persons, including shareholder Hushang Ansary, who, according to ENNIA and the CBCS, are responsible for the serious problems that have arisen at ENNIA.

  The action was taken after an in-depth investigation had revealed that the serious problems at ENNIA were in part caused by large-scale unlawful withdrawals of funds that should have remained available to policyholders. The aim of these proceedings is to secure compensation for as much of these withdrawals as possible, in the interest of the policyholders.

  “A court judgment is not expected in the short term. Extensive legal actions such as this one take time, while tactics to delay the proceedings always remain a possibility.

  “The first phase of the proceedings – summoning of the defendants by the court – has been completed and ENNIA will continue to ask the court for an expeditious handling of the case. The expectation is that it will not be necessary to await the outcome of the proceedings in order to press on with ENNIA’s restructuring to ensure its continuity,” Jardim said.

  “ENNIA too is being confronted with the consequences of the COVID-19 pandemic. Nevertheless, it continues to value social involvement – also with regard to the consequences of this pandemic. It, therefore, also continues to monitor and whenever possible, support social projects,” the Central Bank’s vice president said.

  “Additionally, ENNIA has taken steps to improve the level of service offered to its policyholders in the short term. ENNIA is also pursuing further innovation of its insurance products and is currently working on the implementation of new technologies in this regard.”