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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