Curaçao and Sint Maarten announces Ennia restructure

The Central Bank of Curaçao and Sint Maarten (CBCS) has said it will restructure insurance company Ennia in order to safeguard policy-holders’ and creditors’ interests.

The CBCS said on November 8 that all necessary preparations would be made to establish a new Ennia entity by January 1, 2025.

The central bank said some of the original Ennia entity’s insurance liabilities would be transferred to the new entity. These liabilities were accrued from July 4, 2018, when the Court of First Instance in Curaçao imposed an emergency measure on the firm. The CBCS said the investments legally required to back those liabilities would also be transferred.

Liabilities accrued before July 4, 2018 will stay on the books of the original Ennia. The central bank said these liabilities to policy-holders would “in principle” be paid in full by the original entity.

“The above means that certain policies must be divided into two separate policies,” said the CBCS. “This arrangement ensures that no reduction of policyholder rights will be required. To facilitate this split, the Court of First Instance in Curaçao has granted special authorisation to the [central bank] based on the National Ordinance on the Supervision of the Insurance Industry.”

The CBCS said information systems and other operational assets would be transferred to the new entity to enable it to carry out its insurance activities.

It said that current employment contracts with the old entity would be terminated, and all employees were being invited to apply for employment with the new entity. It said it was also exploring new names for both the new and original entities to avoid confusion.

The CBCS said the restructuring would not affect the legal proceedings against Hushang Ansary, his company Parman International and others. The central bank accused Ansary of setting up shell corporations through Ennia that drained funds from 30,000 pensions across the Caribbean. On November 29, 2021, the Court of First Instance in Curaçao ruled against shareholders and former directors of Ennia. They were directed to pay more than 1 billion Antillean guilders ($560 million) in damages relating to financial irregularities.

The central bank said it remained committed to recovering damages from Parman International, Ansary and others.

A July 2023 report from the International Monetary Fund (IMF) characterised Ennia as a “large non-bank financial institution with substantial uncovered pension obligations”. It advised the authorities in Curaçao and Sint Maarten that it would be “vital to finalise a resolution strategy for Ennia. A decision to recapitalise Ennia needs to be based on a thorough review of its long-term viability. Any solution needs to avoid creating a drain on the CBCS international reserves.”

It warned that any delay in resolving Ennia would have a “significant macroeconomic and social impact”.