Published On: Fri, Jun 30th, 2023

ENNIA needs millions to prevent cuts in pension payments

WILLEMSTAD — Insurance Company ENNIA is on the brink of bankruptcy, a situation that would directly affect more than 25,000 people in Curacao. To become solvent again ENNIA needs 650 million guilders (slightly more than $363 million) of new capital before the end of this year to prevent the need for cuts in pension payments. This appears from a confidential presentation by the Committee Resolution Strategy ENNIA, dated May 29, 2023.

“Continuing the pension payments is not feasible for much longer,” the presentation states. Even values that have been created with premiums paid after the court put ENNIA under an emergency measure in 2018 can soon no longer be exempt from payment cuts.

To prevent that pensioners receive less money in their bank accounts requires an annual contribution of 50 million guilders (close to $28 million) for the next 25 years, the presentation states. These contributions are annual subsidies from the government.

The committee furthermore suggests the establishment of a Resolution Fund, charged with accessing sources for the recapitalization of ENNIA. The sources the committee has in mind are the countries Curacao and St. Maarten, the Central Bank (CBCS), the financial sector, and, as an afterthought, the multimillion-dollar claim on Hushang Ansary.

Other options to get ENNIA out of financially dire straits are financing through capital markets (in the Netherlands or locally), levies on the financial sector, mandatory contributions from the financial sector against interest, using part of the reserves of the Central Bank, dividend payment by the central bank and an increase of the license fee. Currently, the interest rate on Dutch bonds with a term of 25 years is 3 percent. The committee states that the same interest can be offered to the financial sector for mandatory contributions.

The license fee of 1 percent is part of the sales rate of the American dollar (1.82 guilders). An increase of this fee to 1.5 percent would put the sales value at 1.83 guilders.


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