Government’s position regarding ENNIA Caribe Leven N.V

October 6, 2023  –WILLEMSTAD – Pension insurer ENNIA Caribe Leven N.V. (ECL) is a private insurer under the supervision of the Central Bank of Curaçao and Sint Maarten (CBCS). In mid-2018, it encountered financial difficulties due to irregular transactions with affiliated group companies. ECL is classified by the CBCS as an insurer of significant importance to the monetary union between Curaçao and Sint Maarten. This implies that a bankruptcy of ECL could jeopardize the sound development of the financial sector within the monetary union. Based on this, on July 4, 2018, the CBCS requested the Court of First Instance in Curaçao (hereafter referred to as the Court) to apply the emergency regulations, as stipulated in Article 60 Ltv, to ECL and the Ennia Group, which emergency regulations were declared on July 6, 2018, by the GEAC. 

To prevent the bankruptcy of ECL, the CBCS urgently sought financial assistance from the government of Curaçao (and Sint Maarten). In the interest of the 30,000 policyholders, of which 25,000 reside in Curaçao, the CBCS’s request was kindly considered by the government of Curaçao. The discussions then revolved around the possibility of a restart (or the continuation of activities) of ECL through the establishment of a new insurer, which would receive a capital injection of NAf 1.2 billion through a loan from the Netherlands. 

The Netherlands has linked the negotiations regarding the refinancing of the COVID-19 loans (totaling NAf 911 million) to a solution for the Ennia issue. However, during the negotiations, it became clear, based on calculations by the CBCS (Central Bank of Curaçao and Sint Maarten), that taking on two significant loans simultaneously (amounting to over NAf 2 billion combined) would be an unsustainable burden for the government of Curaçao. This would hinder its ability to carry out its duties and make necessary investments for economic growth in the coming years, which is not in line with its financial stability objectives. The College of Financial Supervision (Cft) issued three warnings against taking on the Ennia loan, as it would severely limit Curaçao’s borrowing capacity, with significant financial, economic, and societal consequences for the country. 

Based on the CBCS calculations and Cft advice, the government sought to discuss possible alternative solutions with the Netherlands that would create more flexibility for future loans related to investments in infrastructure, education, and the economy. None of these alternative solutions were accepted by the Netherlands, making it impossible for the government to accept the offer of a loan from the Netherlands for the Ennia restart under the current circumstances. 

Therefore, in close consultation with the CBCS, the government has decided to allocate the necessary funds annually for the next 25 years to ensure that the pensions of ECL policyholders can be paid out if the available resources prove insufficient. This arrangement will be structured in a way that also involves a contribution from the CBCS, and further details will be worked out over the coming months by experts from the Central Bank and those from Curaçao and Sint Maarten. 

It is certain that the CBCS and the government of Curaçao, in collaboration with the government of Sint Maarten, will make every effort to safeguard the pension rights of the total of 30,000 policyholders and the interests of ECL employees to the fullest extent possible, without compromising the interests of the people of Curaçao. The above does not have implications for Ennia Caribe Schade N.V. and Ennia Caribe Zorg N.V., entities that comply with the solvency requirements of the CBCS. 

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