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The CLICO Saga seems to be regaining some steam. It probably has something to do with those rapidly maturing flexible annuities (time deposits) reported to be about 300 million dollars. The Nation newspaper along with the Barbados Labour Party (BLP) have been accessing all avenues opened to them to sensitize Barbados about the horror which is about to descend on CLICO policy and annuity holders. There is the wider implication for the Barbados financial landscape and economy.

BU have to confess we are amazed at the haste which Opposition Mia Mottley and the BLP were persuaded to bring a no-confidence motion to parliament arising from the unfortunate circumstance of CLICO.  When the no-confidence motion failed the BLP promptly took its position on the road. It is only a naive group of people who would support a no-confidence motion supported by public meetings and expect that it would not defeat the government’s preferred strategy to maintain confidence as the circumstance would allow while it look for buyers for the beleaguered company. The protection of CLICO was and still is important to the national interest, in this regard the government and the opposition should have closed ranks on this matter.

Those companies in the region which have been placed under judicial watch what have they accomplished so far regarding the liquidation of assets to the satisfaction of policyholders?

Recent media reports have confirmed the imminent sale of the general and mortgage divisions of CLICO Barbados. The continued negative publicity which has been fuelled by the BLP has effectively destroyed any possibility of the life division being sold for fair value. The hole which will be created by the commitment to honour the maturing flexible annuities will obviously create pressure for any buyer. Who wants the grief of acquiring a portfolio with a customer base whose priority would be to appease a pent-up anxiety?

In hindsight it would have been a more sensible strategy for Prime Minister Thompson to have managed the CLICO matter through a functionary. In Trinidad the Finance Minister did all the front work with little comment from Prime Minister Patrick Manning. There is no doubt that the CLICO matter has been politicized to the detriment of CLICO’s customers. The relationship between Leroy Parris and David Thompson is embedded in Barbados folklore.

The USA at the height of the financial crisis deemed that there were companies too big to fail. In our opinion CLICO fits the definition of  a company too large to fail in a Barbados and OECS context. The fact that it is a company which epitomizes the entrepreneurial spirit of a Black man seems to matter not. Cyril Duprey must be skinning cuffies in his grave.

What has been disappointing in the CLICO discussion so far has been the willingness of those who should know better to follow what other islands have done in relation to CLICO. Barbados has built a sound financial system which has been the envy of many. The obvious failing of the Supervisor of Insurance to perform as required in the matter of CLICO is instructive. BU hope that by now the glaring deficiency which has existed in the Supervisor of Insurance Office has been long corrected. Bear in mind the problem of CLICO’s statutory fund should have been a concern of the former government. Important to note, CLICO Barbados was allowed to remit millions of dollars of dollars to its Head Office in Trinidad without any hindrance from the Barbados authorities under the former administration. Finally the  flexible annuity product which has now proved to be problematic was approved under the former administration.

All of the above demonstrates that CLICO’s problem can be attributed to the regulators and by extension the former government’s inaction. The financial crisis would have exposed CLICO just as it did many other companies around the world. The BLP has no moral or other authority to pontificate on the woes of CLICO. All they have succeeded in doing is to exacerbate the crisis of confidence which has probably help to sustain the run on CLICO. It is sad to witness the demise of a leading Black Pan-Caribbean company which the Barbados opposition has rushed to have dismantled, all in the interest of promoting political agendas.

Unfortunately we don’t see any solution in sight to bail the life division of the company in the present circumstances, the government will have to step in when all efforts have been exhausted.


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185 responses to “The CLICO Political Football”

  1. Alex Fergusson Avatar
    Alex Fergusson

    Here is more of that No Confidence Motion of March 6, 2009. These questions show that david thompson’s DNA is all over Clico.

    This is a DLP government that says it is “squealy clean,” yet the brightest people in the world are referring to Clico as: “an elaborate ponzi scheme.”

    You have this cesspool at Clico, yet the AG is calling ZR drivers a threat to national security.

    This cesspool at Clico, yet children are being asked not to take drums and musical instruments to the Stadium.

    This cesspool at Clico, but children are being banned from traveling on Mini-Buses and ZRs.

    This nasty, stinking, smelly cesspool at Clico, but children are being blamed for problem in our society. Really!!!

    ++++++++++++++++

    The Leader of the Opposition of Barbados – The Hon. Mia Amor Mottley, Q.C., M.P.:

    “Mr. Speaker, let me ask some question.

    Who is the Minister of Finance that waived 13 property transfer taxes for CLICO in respect of properties against the advice of the public officials?

    Who is the Minister of Finance that purchased in Aquatic Gap, a commercial property from CLICO for $250 000 in a prime commercial location? Sir, look at the signatures of Mr. Parris and Mr. Thornhill. Sir, that too is a document of the House.

    Who is the Minister of Finance who used to go about with CLICO selling products in the United Kingdom, the United States of America and Canada?

    Who is the Minister who went to intervene in the Eastern Caribbean to deal with the statutory fund deficit?

    Who is the Minister of Finance that a member of his Opposition office paid for by CLICO?

    Who is the Minister of Finance flying on an $18 million jet in Opposition and in Government, when he was advised not to do so? Sir, a jet owned by CLICO bought out of the premiums of hardworking Barbadians.

    Mr. Speaker, I know who is close to the Chairman of CLICO and, Sir, it is not the Honourable Member for St. Peter or myself and Barbadians will judge accordingly.

    Friday, March 6, 2009
    Continuation Hon. Miss M.A. MOTTLEY:
    I say, Sir, as if all of that were not enough, the repeated failure of this Minister of Finance to disclose his interest and to declare his assets, as we have done, is what stands to condemn him today, Sir. I will show you why, Sir.
    In this House, last year, I disclosed that I had $5 000 in the CLICO Balance Fund and I have asked for that to be moved. I am worried because it is the Minister of Finance and the Chairman of CLICO, in 2007, who purchased cash for $925 000, a property at Martins Bay. Here is a Minister of Finance in a business relationship with the Chairman of CLICO. I want to know, Sir, what else is there that he has to disclose that may affect his decision making as Minister of Finance.

  2. Alex Fergusson Avatar
    Alex Fergusson

    I FIRMLY BELIEVE that history exists for a purpose: to learn from it and use the lessons gained to guide decision-making in the future. That, simple principle seems lacking in every facet of our society.

    There are times when the good of a people or the good of a country must take priority over all other matters or considerations. In such circumstances, our moral principles dictate our courses of action and shape our conduct and attitudes. This is the guiding principle that should be applied to all scenarios of a national nature. As ordinary citizens, we should always expect our leaders to adhere to this important principle.

    How come, then, the situation with respect, to CLICO got so out-of-control, for want of a better expression? In this life, the truth alone is the truth! Wrong can never be right! Casting, aside for the moment the divisiveness that so clearly characterises our political landscape, I can now state with certainty that when it comes to CLICO, Prime Minister David Thompson was wrong and Opposition Leader Mia Motley was right all along.”

    +++++++++++++++++++

    The above is an extract of what was written by Dr. Brian Francis in the Business Authority of Monday April 5, 2010.

    Click here to read the full story: http://blp.org.bb/news/1214


  3. How the Nation Newspaper is presenting the CLICO story is an abomination. Leroy Parris was correct yesterday in cussin them. Of course the paper has used it to fan the story some more. A case of the bottomline. More on this later.

  4. Alex Fergusson Avatar
    Alex Fergusson

    @ David,

    In what capacity was Parris speaking yerterday?

    Is it not true that former Attorney for Clico, david thompson – who is now Minister of Finance under whose Minister responsibility for Insurance Companies fall – set up an Oversight Committee, which is running the day-to-day affairs of Clico?

    How then can Parris call a staff meeting? Did he get permission from the Chair of the Oversight Committee?

    This is a very messy cesspool!!!

    In it all–Parris has been disrobed. He is now mortal and a very naked old man and he cannot deal with that.

    In fact, Parris is now – nobody. That is the source of his pain. He is simply–“nobody.”

    He has power without authority and is therefore: “NOBODY.” He is the Head but not in charge. He is simply: “NOBODY.”

  5. Alex Fergusson Avatar
    Alex Fergusson

    Sorry about that. I meant:

    “under whose Ministry, responsibility for Insurance Companies, fall.”

  6. Alex Fergusson Avatar
    Alex Fergusson

    Spending big bucks of heaven knows whose money – to now cover their tracks:

    http://www.trinidadexpress.com/index.pl/nart?id=161623489

    +++++++++++++++++++

    How come this angle did not work for Bernard Madoff and Allan Sanford? Good thing the court is not on their payroll?

  7. Donald Duck, Esq Avatar
    Donald Duck, Esq

    Who is going to replace clico as the big father giver in the upcoming T&T elections!!!


  8. @TE

    Dr Marshall may be reading this. But he does not seem to have read the Clico Int Life balance sheet. The origin of this crisis lies in Clico Int Life’s overstretched capital structure and nowhere else. It had little chance of weathering any lengthy economic downturn.

    Those who look to the Nation newspaper, Mottley, William Layne etc as responsible for the dreaded ‘run’ have started their analyses in the wrong place.

    When a crowd flees a building during an earthquake some may get crushed to death the panic. Got a few pun this thread who would pin the blame for that on the crowd – or the person who says,”Wait, chief, this house shaking damn hard, man!” Meanwhile, the earthquake escapes prosecution.

    Let those complacent devotees of the ‘run’ thesis test the word/guarantee of the building contractor as to the strength of his work. The sensible will depart with what they can.

    @David,

    Nation reported its own cussing. Looking over some of the material published here down the months pelting ‘abominations’ through your own window would be ironic.


  9. @Sylvan Greenidge,

    You seem to be trying to absolve the previous administration of liability in this matter but I don’t believe that a reasonable person would accept that.

    “The EFPA is NOT a conventional insurance product and does not require the security of a statutory fund.”

    You may be right that this product is in substance an investment product but remember it is an “ANNUITY” product which IS a conventional insurance product. My information is that it was approved by the Supervisor of insurance as an insurance product and therefore the statutory fund requirement WOULD apply. Do you have information that this is not true? Colonial Life’s website describes it as “an insurance product specially designed to ensure security for you and your family.” Should it have been regulated by the Central Bank then and not the Supervisor of Insurance?

    “The largest portion of the statutory fund deficit would have to represent the policies taken over by Clico Bds from Clico Trinidad in 1997. ”

    Sylvan Greenidge, you argued initially that the statutory fund requirement did not apply to these policies because they were written by a Trinidad company. Now you seem to have changed your argument. To the extent that Barbadian policies were taken over in 1997 the statutory fund requirement WOULD apply. Why was this not enforced? Oh right, the IOU from CL Financial.

    “The Supervisor of Insurance can hold an IOU from a parent company on behalf of its subsidiary.”

    Sylvan Greenidge, if you argue that it was appropriate for the Supervisor to accept an IOU from Colonial Life in lieu of assets placed in trust, then how can you blame the DLP government now for the issues with Clico? The problem is that an IOU was accepted and then the IOU became worthless when CL Financial got into difficulty. Too bad there was not a legal requirement for something more reliable than an IOU, perhaps something like a requirement to place real assets in trust to the order of the Supervisor of Insurance. If only someone had thought of this in advance.

    “I agree with Alex Fergusson Thompson ‘s fingerprints are all over Clico. Can Clico go down without bringing down Thompson with it?”

    I don’t believe this should be made into a partisan political football, but surely any reasonable person must conclude that the blame for this mess lies mainly with the Owen Arthur administration. Clico Life broke the law and the Supervisor took no action. The Supervisor reports to the Minister of Finance.


  10. @Sylvan Greenidge,

    Your argument about the statutory deficit arising primarily on the pre-1997 policies is at variance with this statement from the PM:
    ____________
    According to Thompson, in 2004 the requirement under the Statutory Fund was $123.6 million and CLICO put up $123.6 million in assets.

    However, in 2005, when the Statutory Fund requirement was $154 million, CLICO’s assets pledge totalled only $123.6 million, he said.

    In 2006, the pledged assets were $123.6 million, while the Statutory Fund requirement was $191.4 million; “so there was a deficit of $30 million, and it started to climb,“ he added.

    In 2007, the pledged assets were $155.9 million and the Statutory Fund requirement was $248.8 million, according to Thompson.
    __________________

    What say you Sylvan Greenidge? You have also argued that the emphasis of Clico Life’s was on EFPA’s and that these do not affect the statutory fund deficit because they are not insurance. So how did the deficit noted in 2005, 2006 and 2007 arise?


  11. The below Media Statement was released late this evening by Mr. Dale Marshall, Q.C., M.P., Deputy Political Leader of the Barbados Labour Party:

    +++++++++++++++++++++++++++++++

    “MEDIA STATEMENT BY Mr. DALE D. MARSHALL, Q.C., M.P.,
    DEPUTY POLITICAL LEADER, BARBADOS LABOUR PARTY
    “CLICO AND LEROY PARRIS’ PRESS CONFERENCE”

    Following the statement ON April 7th, 2010 retiring Chairman of CLICO Life, Mr. Leroy Parris – existing Policyholders and annuity holders have been left none the wiser as to their fate in respect of the recovery of their policies or deposits.

    His comments have come on the heels of the announcement by the Prime Minister that the Supervisor of Insurance had suspended CLICO Life from the sale of insurance policies and that there would probably have to be an application for judicial management for the company.

    This was later followed by the statement of Mr. Terrence Thornhill (President of CLICO) that even after the assets were sold off there would be difficulty in meeting the claims of the policyholders and annuity holders. These two statements have justifiably caused great concern among the Barbadian public.

    However, what is needed now from Mr. Parris is the clear explanation of the way forward. This is what Barbadians are interested in.

    While there is tremendous sympathy for the employees of CLICO Life, we must not forget that this situation currently affects one (1) in every two (2) households and threatens to affect every household if the Government of Barbados has to bail them out.

    Judicial management will allow for the preservation of the assets and also, most importantly, for transparency and fairness in the settlement of benefits to policyholders and annuity holders.

    Instead Mr. Parris chose to go on the attack and ignore the real cause of CLICO’s demise.

    The submission of Part One of the forensic auditor’s Report on CL Financial in Trinidad, which has now been submitted to the Director of Public Prosecutions, must be known by him – as a former director of CL Financial.

    In that context, his attacks appear as though he is looking for a scapegoat for CLICO’s misfortunes. His attack on William Layne, Permanent Secretary in the Ministry of Finance and Chairman of the Oversight Committee is unacceptable and should be publicly deprecated by the Prime Minister and Minister of Finance, David Thompson.

    His attack on the Nation newspaper is contrary to the principle of editorial freedom in the context of a free and fair media. Such freedoms do not obtain at the CBC where he is still the Chairman.

    I accept that Mr. Parris may feel justified in attacking politicians, as his behaviour has always reflected a heavy political bias. Consequently, his attack on the Leader of the BLP, Mia Mottley is no surprise. However, it should be noted that she and the Barbados Labour Party have been vindicated in the course of action necessary to have the policyholders and annuity holders protected as they seek to recover their money.

    8th April, 2010 -ENDS-

    ++++++++++++++++++++++++

    “The submission of Part One of the forensic auditor’s Report on CL Financial in Trinidad, which has now been submitted to the Director of Public Prosecutions, must be known by him – as a former director of CL Financial.”


  12. @Brutus

    BU asked Sylvan and Alex to speak to the fact the annuity product was approved under the last government.

    The fact that Clico life has paid out 118 million and is still standing speaks volumes.

    Clico has a lot of valuable real estate/property, who will get the last laugh the DLP or the BLP? If Clico life is able to liquidate assets and provide cover to the quickly maturing annuities it will become an interesting place come 2013.


  13. David, I just met a prominent member of the Dems and a former close friend of Sylvan Greenidge.

    The guy told me emphaticallt that you will never get those answers from Greenidge. He was fired by Parris from Clico for stealing and he would not pay his mortgage to a Clico company.

    He has an axe to grind.

    These guys are really dishonest types who infect political parties just to get what they want.

    I now understand his passion to get at Parris.


  14. This Carol writing styles resemble WIV. Somebody always telling him something.
    Interesting indeed!!!!!

  15. Sylvan Greenidge Avatar
    Sylvan Greenidge

    Donald Duck, Esq ask:

    “Who is going to replace clico as the big father giver in the upcoming T&T elections”!!!

    I don’t know who will be the father giver in T&T election but I know who will be the father giver in the next election in Barbados – Sol.

  16. Alex Fergusson Avatar

    The CLICO Bubble

    The apologists for CLICO in Barbados are starting their spin. It is not that the company was badly managed they say, it is the Executive Flexible Premium Annuity (EFPA) product that is making the sale of CLICO Life unattractive to prospective buyers.

    So who made the decision to introduce what is now a $300 million liability on the company’s books? Did it drop from Mars into the company’s financial portfolio? We know of at least two men who are presently languishing in jail in the USA for operating similar funds. Give us your money they said and we will give you an above market payout in a few years.

    What separates the Madoff and Stanford ponzi schemes from CLICO’s EFPA? It is now clear that this fund cannot stand on its own. Who will be held responsible for the potential losses to hundreds of Barbadians who bought into the hype and invested in CLICO’s EFPA if the company cannot repay them?

    The bubble is about to burst. Apart from more lip service from the Prime Minister, the unfortunate Barbadians whose investments are at risk are getting no assurance from the Government that they matter. They want to know who have been paid out, how much and when? They want to know who will decide who will get what and when? They want to know what happened to their money?

    We have heard from the Prime Minister that he cares about CLICO’s employees. He even did his part and gave a former CLICO employee a Senate seat and a job in his office. We also care about CLICO’s employees, but there is a larger principle at work here.

    That is the role a government must play in protecting the public good. When governments elsewhere have bailed out private financial institutions, the transactions have been transparent, there have been consequences attached and there has been a clear exit strategy.

    Yet here in Barbados, this Government has chosen not to make its handling of the CLICO affair open to public scrutiny. Why? The Prime Minister has lurched from an unqualified defense of the company’s soundness to a secret Memorandum of Understanding to what the Leader of the Opposition put on the table long ago, judicial management by the Court.

    This has made Barbadians question whether CLICO has some special status. Would the same treatment have applied to Globe Finance or Consolidated Finance or CGI? If the answer is yes then the Government has a flawed approach to protecting the public good.

    With the question of the legal responsibility of the Directors buried deep in the hyperbole, new information about the role of the Chairman and the President in a company called Professional Financial Services brings into sharp relief the question of corporate governance at CLICO.

    How is it that the CLICO Group (with a general insurance company among its companies) would farm out the insurance of property it owns to a competitor?
    Why would they place their business with CLICO General through a company acting as an agent – and more so when that company is not theirs but related to the Chairman of CLICO Holdings Barbados?

    Why should CLICO General pay a commission on the premiums of 10-15% to this company on business written from its affiliated companies? How much revenue has CLICO General had to pay out in commissions to Professional Financial Services for writing business from other CLICO companies?

    These are serious matters. They give insight into how CLICO was managed in Barbados. In spite of the announced retirement of Mr. Parris, these must also be addressed as we gather greater information on the plans to move forward for judicial management of CLICO Life so that assets may be stabalised to satisfy claims and transparency will attend to the distribution of the benefits to the policyholders and annuity holders.

    +++++++++++++++++++

    The above is the BLP’s view, which will be broadcast at 2:05 today on VOB


  17. Let’s see if VOB really broadcasts what is written above in its entirety.

    There are at least two aspects of the content that in my view are likely to attract litigation:
    – the comparison of Clico’s EFPAs to a ponzi scheme
    – the disparaging references to Professional Financial Services. Wasn’t the Nation already threatened with legal action over this?

    There are definitely aspects of the handing of Clico matter that should be cause for concern but the BLP has gone overboard in my view.

  18. Alex Fergusson Avatar
    Alex Fergusson

    @ Brutus,

    Here is what was said already by the forensic specialist about annuities:

    ““FORENSIC investigator Robert Lindquist has uncovered what is being described as an elaborate scheme within the CL Financial Group, where annuities, with attractive returns, were being sold by insurance power house CLICO but that customers’ investments were being funnelled for ghost services to the group.

    Reliable sources have disclosed that the scheme, akin to the Ponzi scheme operated by Wall Street money manager Bernard Madoff, was launched back in 1997 as CL executives took advantage of a loophole in the existing insurance legislation and excess liquidity in the marketplace.”

    http://www.trinidadexpress.com/index.pl/article_news?id=161487723

    +++++++++++++++++

    Sue my ass!!!

    The Trinidad Express reported yesterday that the first part of that report has already been handed over the the DPP in Trinidad. Brutus, your scare tactics, those of the DLP and Clico – will not work.

    Please click here to read what the Trinidad Express reported yesterday about CL Financial:

    http://www.trinidadexpress.com/index.pl/nart?id=161623489

    Thank God that the law courts are not on CL Financial’s or Clico’s pay roll.

  19. Alex Fergusson Avatar
    Alex Fergusson

    @ Brutus,

    Your post above emphasises why there is need for a forensic audit of Clico and why the report needs to be given to the DPP.

    Ask yourself, how could Clico pay for a full page advertisment in a Sunday Paper, which cost some $$5,000 but little old ladies who are trying to get $500 out of that comnpany – cannot get a cent?

    WHERE IS THE FORENSIC AUDIT OF CLICO? I SAY–BRING IN Robert Lindquist?

  20. Alex Fergusson Avatar
    Alex Fergusson

    @ Brutus,

    “Judicial management will allow for the preservation of the assets and also, most importantly, for transparency and fairness in the settlement of benefits to policyholders and annuity holders.”

    ++++++++++++

    Don’t you find it strange that Wishing In Vain is speechless on this? Why do you think so many DLP Ministers and M.Ps are pushing down each other talking crap in the papers daily?

    Don’t you find it strange that david thompson’s portfolio is the one most in crisis but he is most silent?

    It was thompson who told this country that Clico was sound, prudently managed and well regulated. yet, his government then gave Clico $10 million and then another US$5.

    A Forensic Audit would find where that money went and prove that thompy was telling lies, except that you Brutus already know that!

    +++++++++++++++++++++++

    By the way – what will Leroy Parris’ retirement package be?

    How come he created that nasty; stinking mess and cesspool at Clico – but will now get a lump sum payment or golden parachute even before little old ladies can get their life savings?

    This is why a Forensic Audit is critical. Bring in Robert Lindquist?


  21. @Alex Ferguson,

    You referred to my scare tactics – I had a good laugh at that one.

    I have no objection to a forensic audit or an investigation of some sort, and Lindquist may be the best man for the job since he has already worked on CL Financial.

    However if you make insinuations about Clico Barbados based only on “reliable sources” who were speaking about Clico Trinidad then I strongly suspect that will be a matter for the lawyers.

    I think that “the preservation of the assets and transparency and fairness in the settlement of benefits to policyholders and annuity holders” are extremely important but I am not convinced that judicial management is the best way to achieve this.

  22. Alex Fergusson Avatar
    Alex Fergusson

    @ Brutus,

    PS Layne who is “BRIGHT” said that Clico Life is a “big turn off.” Thompson said in his quarterly media conference shortly before that Clico is an attractive entity. Another thompy lie.

    PS Layne said recently that there is a mismatched between what Clico owes and what it owns.

    Brutus, does Clico have the $300 to pay Annuity holders in 2012? People on the Oversight Committee say “NO!”

    Even Terrence Thornhill – who is brighter than Parris by far, now admits that that even after the assets were sold off there would be difficulty in meeting the claims of the policyholders and annuity holders.

    Clico Barbados is therefore “an eloborate ponzi scheme.” It now desperately tires to write new busines to take the premiums to pay people it owe. That is how a ponzi scheme works.

    It takes your money and pay thompson and take money from other people and give the DLP as campaign contributions.

    It is why I say: bring-in Robert Lindquist.


  23. @Alex Fergusson,

    Why did you go back to this Ponzi scheme talk when I heard nothing of it on the broadcast a few minutes ago? Or did I miss it – I listened carefully but maybe I missed it.

    I actually think the BLP are making a lot of sense when they say that the main issues are preservation of assets, and transparency and fairness in settlement of assets. I like that a lot and I think they should push it very hard. I also think that it is fair game to challenge the government to explain why they did not opt for judicial management from the outset and to provide more information on the operation and composition of the Oversight Committee, including the MOU.

    However I have not heard any evidence to date to suggest that Clico Life Barbados does not have enough assets to settle all of its liabilities. The issue that has been raised is one of LIQUIDITY. They do not have the liquid assets to settle such a large number of claims so quickly. As has been pointed out on this blog even the nest run financial institution would have had similar issues in the face of a run on policies.

    So if that concern is your reason for saying bring in Lindquist then I withdraw my support.

  24. Alex Fergusson Avatar
    Alex Fergusson

    @ Brutus,

    Read below and then lets talk.

    Note that once new regulations were introduced, Clico did not stand a chance. By the way, where is the FSA thompson promised by the first quarter of this year? is Clico the reason he cannot bring it?

    You see why Robert Lindquist needs to be brought-in quickly?

    ++++++++++++++++++++

    Fixing the Clico problem
    Thursday, April 8 2010

    THE possibility of criminal investigations aside, the challenges at Clico have overwhelmed everybody. What is now clear is that Clico was going to run into problems anyway and these were merely hastened by the 2008 changes in the Central Bank requirements for financial institutions. ”

    http://www.newsday.co.tt/businessday/0,118714.html

    +++++++++++++++++++++++++


  25. @Alex Fergusson,

    Thanks for the link – that was interesting reading but I am not sure what it is that you thought was significant to our current discussion which is about Clico Life Barbados.

    By FSA, do you mean the Financial Services Commission? The same one that the previous government promised as far back as 2007? Yes, I think Lindquist would have lots of work in Barbados but perhaps both major political parties have reason to fear this.
    ______________________________________
    Wednesday, February 14, 2007

    BRIDGETOWN, Barbados (GIS): Later this year, the Barbados government will be setting up a Financial Services Commission “to enhance the supervision and regulation of financial institutions in Barbados”.

    Minister of Commerce, Consumer Affairs and Business Development, Senator Lynette Eastmond, made this disclosure today while addressing the beginning of an eight-day course on “Advanced Examination Techniques” hosted by the Co-operatives Department.

    The Minister noted that the proposed commission “would integrate regulators of the Co-operatives Department, the Securities Exchange Commission, the Business Development Unit of the Ministry of Economic Affairs and Development and the Office of the Supervisor of Insurance and Pensions”.


  26. Both the DLP and BLP have to take responsibility for the weaknesses in local insurance regulation. The extract below is from the IMF Financial System Stability Assessment performed in March and April 2008:

    “The lack of adequate supervision of the insurance sector exposes the sector to material risks. Profitability and capital adequacy in this sector are difficult to assess due to incomplete and inadequate data. Single negative events may significantly damage the reputation of a jurisdiction in an increasingly regional and global market. Although the mission noted the introduction of on-site inspections, the sector remains largely self-regulated owing to continuing shortages of qualified staff, inadequate regulation, and out-of-date financial reporting. Greater cooperation and exchange of information, particularly with the authorities in Trinidad and Tobago, are necessary to facilitate effective assessment of financial soundness and the protection of Barbadian policyholders by the supervisor.”


  27. Interesting article in the Nation today, don’t know what to make of it.


  28. @David,

    The Nation is finally trying to be balanced in its reporting??


  29. @Brutus

    Note the last paragraphs of the article which sums it up really:

    They said that in other Caribbean jurisdictions the opposition, government and other stakeholders came together and encouraged people not to panic. They said these parties in those countries understood the need for a calm approach and the ripple effect that panic could cause to their economies.

    Collymore said that the strength of CLICO could be seen in the fact that despite its challenges – paying out $118 million to policyholders and the run on the company – its doors remained opened, and it still continued to do business.

    Bovell suggested that in an unusual circumstance, there was nothing wrong with people looking for unusual ways to fix the prevailing problem. He said solutions to the situation could be found from within the precincts of knowledgeable policyholders, agents, other industry players and the wider society.

  30. Alex Fergusson Avatar

    MONTEIL SUED BY CIB OVER HMB SHARE DEAL
    By Andre Bagoo Sunday, April 11 2010

    FORMER PNM Treasurer and Clico Investment Bank (CIB) chairman Andre Monteil yesterday indicated that he breached no duties in relation to his controversial acquisition of some $110 million in Home Mortgage Bank (HMB) shares in 2007, in the face of a $100 million lawsuit launched against him by the Central Bank’s Inspector of Financial Institutions, Carl Hiralal, over the transaction.

    Monteil argued that he had obtained a board approval for the HMB sale and said he was “shocked” by word of the lawsuit for which he had not, up to yesterday, received any notice.

    “If I went to the board and they approved it, what is the issue? If I disclosed an interest, disclosed that and asked for permission from the directors what was the issue?” Monteil told Sunday Newsday.

    Hiralal, who was appointed manager of CIB after the Central Bank exercised emergency powers under the Central Bank Act in January 2009, this month signed off on a lawsuit brought by CIB against Monteil, who was director and chairman of CIB at the time of the HMB share transfer to Monteil’s own company Stone Street Capital.

    The lawsuit, filed on Friday in the High Court and reported on State television CNMG that night, calls for a tracing of assets and accuses Monteil of several breaches of company law and common-law and fiduciary duties, including:

    http://www.newsday.co.tt/news/0,118856.html

    ++++++++++++++++++++

    @ Brutus, read here and tell me if you see any similarities with what Leroy Parris and Thornhill are saying about the below:

    With the question of the legal responsibility of the Directors buried deep in the hyperbole, new information about the role of the Chairman and the President in a company called Professional Financial Services brings into sharp relief the question of corporate governance at CLICO.

    How is it that the CLICO Group (with a general insurance company among its companies) would farm out the insurance of property it owns to a competitor?

    Why would they place their business with CLICO General through a company acting as an agent – and more so when that company is not theirs but related to the Chairman of CLICO Holdings Barbados?

    ++++++++++++++++++++

    @ Brutus

    Then read the Nasau Guardian of April 9, 2010 about : A fiduciary duty is an obligation to act in the best interest of another party.

    “In addition to securing a sale, Scott said the liquidator “will be going after directors who breached their fiduciary duty – not only to the company but to policyholders,”

    He continued, “There are various breaches of fiduciary duty so we will be going after directors and other persons or agents associated with CLICO – professional agents and that’s part and parcel of the recovery process – there will be action for damages and so forth.”

    A fiduciary duty is an obligation to act in the best interest of another party.

    Michael Scott, the attorney representing liquidator Craig Gomez told The Nassau Guardian yesterday that they hope to finalize the sale before the end of the month.

    “Right now our most important concern is to protect the more that 24,000 policyholders who held life products in one form or another,” Scott said.

    “We’re proceeding feverishly to assign or to sell that portfolio so that the over 24,000 policyholders are protected.”

    http://blp.org.bb/news/1221

    ++++++++++

    Notice everybody associated with Clico is now either threatenting legal action or saying that they did nothing wrong. Even Duprey is trying to get the court to stop him being investigated.

    Madoff and Alan Sanford must be shaking their heads in disbelief!!!


  31. @ David

    Your above merely highlights how things have (forced) changed at Clico. That those agent can now speak is remarkable, but they do so in their personal interest.

    There was also a time not long ago when Clico was considered the biggest anti-worker and anti-union establishment in Barbados.

    People were actually fired from Clico because they wanted to join the BWU.

    Now that Parris has been, disrobed and humbled and people can no longer make large commissions– there is an attempt to give Clico a human face.

    Protecting what policy holders what!!!???

    Read the nassau Guardian last Friday. It is the liquidators who are seeking to protect policy holders.

    Those agents made a lot of money as commission selling Clico’s products. They care about money and their continued ability to participate in that elaborate ponzi scheme to make more.

    That they cannot now make large commissions – is their sense of discomfort.

    I say, bring in Robert Lindquist!!!

    Then let us talk about breaches of fiduciary duty and the DPP.

  32. Alex Fergusson Avatar

    Is Leroy Parris involved in insider trading

    ++++++++++++++++

    He was involved with a company which gave CLICO competition but did Leroy Parris also withdraw funds from Clico shortly before its decline?

    Was he undermining Clico knowing thta his company would benefit?

    How much did he withdraw from Clico? Isn’t that insider trading? Did Leroy Parris cash-in his policies because he had inside information that Clico was crashing?

    Did Thompson cash-in any too?

    In America, President Obama said that instead of large bonuses, CEOs should take shares. If the company fails then those shares are worth nothing. So the onus is on CEOs to manage the companies well so that their shares would be worth something.

    The other question is: since Permanent Secretary Layne (Finance) is working for the people of Barbados and is head of the Oversight Committee Thompson set up, then why did Thompson (The Minister of Finance) and PM – who has responsibility for the Public Service – not defended PS Layne when thompson’s friend Leroy Parris verbally attacked him?

    It is thompson and Parris who caused Clico to crash? thompson’s DNA is all over Clico, so why blame PS Layne?

    It is why I say, bring in Robert Lidquist. he will tell us how much Parris; the DLP and Thompson took out, especially since the DLP will not say.

    Conflict of interest and insider trading.

  33. Donald Duck, Esq Avatar
    Donald Duck, Esq

    Who are the members of the oversight committee. Why is this so top secret????

    WIV- why is your government only revealing the names of a few members of the committee?


  34. Here is what Governor Delisle Worrell had to say about CLICO at his most recent press conference in reviewing the first quarter performance:

    Government has also stated its commitment to a resolution of the affairs of Clico Holdings Barbados and its affiliated companies that do not result in a loss of principal to any member of the public who invested in these companies. Final details are still being worked on, but it is clear that such a resolution will require that some of Clico’s liabilities to the public will have to be replaced with liabilities of longer maturity.

  35. Donald Duck Esq Avatar
    Donald Duck Esq

    The names of persons on the oversight committee has finally been revealed in today’s sunday sun. Why is it that the former managing partner of clico’s auditors in Barbados is on the committee when he only retired from the audit firm shortly before the committee was established?

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