The CLICO fiasco continues to hog the news. It is a story which has tainted the government of Barbados for almost the duration of its tenure. BU remains sympathetic to the ‘sufferation’ of thousands of Executive Flexible Premium Annuity (EFPA) CLICO investors and the others. Many were lured by the greed of high interest rates, some appeared to be ignorant to the benefit of diversifying personal investment portfolios. What makes the CLICO fiasco one with a difference is the extent regional governments and regulators are to be held accountable for CLICO’s ‘failure’. In the case of Barbados a very close relationship between the late Prime Minister David Thompson and former Chairman of CLICO Holdings Leroy Parris added to the intrigue.
In his wrapup to the this year’s budget Minister Chris Sinckler promised CLICO policyholders that there is light at the end of the tunnel. Despite the snippets here and there CLICO investors continue to stumble in the dark. The word on the street is that the judicial managers have recommended an injection of capital into CLICO to fund the shortfall in assets of 152 million dollars that will see CLICO morphing to a new company. BU believes if this is true it is laced with uncertainty.
The insurance business requires confidence from the market to be successful. Is there a precedent in the region where an insurance company was restructured successfully? Given the controversy which has enveloped CLICO most if not all of CLICO policyholders want their money. Given the harsh economic times the desire to withdraw the maturing EFPA’s will be strong. Such a sentiment does not bode well for a rebranded company funded with CLICO assets plus tax dollars. What are the alternatives? To liquidate the assets of CLICO will take years.
The claim by Neal Bisnath during the Commission of Enquiry into the collapse of CL Financial and the Hindu Credit Union (HCU) – an attorney from CLICO – that “LAWRENCE DUPREY was paid $1.1 billion from the deposits of CLICO policyholders in the five years prior to CL Financial seeking a billion dollar bailout from the Government” has caused many to sit up. The revelation, if true, is not only an indictment on Duprey but also on current and former CLICO executives, Central Bank of Trinidad, Government of Trinidad and CLICO Auditors. In the CLICO debate we have tended to personalized the arguments and in the process many who should already be fired or incarcerated are operating as if nothing has transpired.
BU’s position regarding CLICO is known. Both political parties have contributed to where we find ourselves. Our regulators have been weak and fell asleep on the job. To be expected the Barbados Labour Party has sought to make political mileage from the fiasco although it must be stated that under Owen Arthur the noise has become muffled.
Some may not appreciate the remark but somewhere in the great beyond the late Prime Minister David Thompson is wearing a smile. When he died he took many secrets with him about CLICO. Let us not forget he was Leroy Parris’ lawyer and also represented CLICO at times. Time will tell if his wife who succeeded him in Parliament will be forced to defend his legacy.
On the sideline Al Barrack owed 65 million plus interest is observing how the CLICO fiasco plays out.
Leave a Reply to BAFBFPCancel reply