Published On: Wed, Sep 27th, 2023

Minister Irion: Solution for Ennia becomes unattainable if not all parties agree

PHILIPSBURG — Refinancing of the corona liquidity loans hinges on an agreement about a solution for embattled insurance company Ennia. The deadline to reach an agreement is October 15.

“This agreement remains subject to parliamentary approval,” Minister of Finance Ardwell Irion states in a press release. “The Ministry of Finance is actively engaged in negotiations to find a mutually agreeable solution, understanding the significant impact in has on policyholders and the broader community. Collaboration between Curacao, St Maarten, and the Netherlands is essential for reaching a resolution that safeguards the interests of all stakeholders.”

Minister Irion states that the loan mentioned by State Secretary Van Huffelen is favorable to St. Maarten: “Full refinancing, interest-only terms and a spread repayment profile.” The minister points out that this offer requires “the resolution of the Ennia situation.”

Minister Irion describes the current situation in a seven-point explanation. any agreement requires approval by Curacao, St. Maarten, the Central Bank of Curacao and St. Maarten 9CBCS) and the Netherlands.”The Netherlands has expressed its willingness to provide a capital injection, contingent upon approval by the Dutch Second and First Chamber.”

If any of the parties does not agree “a solution for Ennia becomes unattainable,” the minister states.

Negotiations on a technical level between Curacao, St. Maarten, the technical committee Ennia, the Central Bank, the Minister of Home Affairs and Kingdom relations, the Dutch Central Bank and the Dutch Ministry of Finance have made one thing clear: intervention is necessary because Ennia does not have enough capital and because without a financial injection almost 30,000 policyholders would face substantial pension reduction (according to some reports of up to 80 percent) “leading to sever social and economic consequences.”

Parties have reached an outline agreement, stipulating that Ennia will undergo a “solvent restart with a substantial capital injection.” However, this agreement still requires confirmation at the ministerial level and it is subject to parliament’s approval of the 2024 budget.

Minister Irion also points out the problem the loan represents for Curacao: the Ennia-loan would   increase its national debt and its debt to GDP ratio and it would also cause the country’s the interest burden to exceed the standard established in the consensus kingdom law financial supervision. Financial supervisor Cft has addressed this concern and it is currently negotiating with Curacao to solve the issue.

Minister Irion notes that the loan’s impact on the budget will only become clear after the agreements are finalized.

The Netherlands will finance the capital injection for Ennia through a loan to St. Maarten and Curacao. The countries will in turn lend this money to the insurance company. While the interest St. Maarten will have to pay to the Netherlands will be equal to the interest Ennia will have to pay to St. Maarten, the Cft will add these charges to the interest burden. For St. Maarten it will amount to 26.6 million guilders ($14.8 million), which is under the current ceiling of 32.7 million guilders ($18.3 million).


Related article: Ministry of Finance Outlines Ongoing ENNIA Situation and Proposed Solutions