CLICO Weighed In The Balance

BIPA’s Ad

The proposed settlement by the judicial manager, Deloitte Consulting Ltd to resolve the problematic Clico International Life Insurance Ltd (CIL) matter has been met with a predictable disapproval by The Barbados Investors and Policyholders Alliance (BIPA). The recommendation to settle is to float a bond whose proceeds would be used to acquire qualifying assets that would be transferred to the buyer of the insurer’s traditional business as well as fund the partial payment and restructuring of the EFPA portfolio.”  For the proposal to work the governments of Barbados and Trinidad are expected to back the bond which amounts to close to BBD400 million. Those affected countries in the Eastern Caribbean (Antigua, Anguilla, Montserrat, St Vincent, Grenada and Dominica) would have to commit to the deal “by committing their state agencies to invest directly in the bond issue.” Most of the islands in which CIL operates are highly indebted.” – see T&T Guardian Article.

BIPA in response has expressed the concern that any deal must “include(s) full reimbursement of the dozens of people whose policies have already matured”. According to them “of BIPA’s 385 members, 46 have policies that have reached maturity – 39 of them being Executive Flexible Premium Annuities (EFPAs) and the other seven in Flexible Premium Annuities (FPAs).” If BIPA maintains its position the CLICO matter is destined to be hogtied by bottomless complex and legal considerations. There is every likelihood that the only parties who will come out the winners in this matter will be the lawyers and the judicial manager.  A few months ago a report was posted to show that Deloitte’s fee had reached $7.2 million.

From the start of the CLICO Mess BU suggested that besides being turned into a political football, the parlous state of regional economies makes it difficult, if not impossible, for CLICO policyholders to be 100% indemnified. This is a case where there will be losers. Where will our impoverish governments get the money from to bailout CLICO policyholders? If the governments go ahead and bow to political considerations how will the international financial and rating agencies react? The harsh reality is that CLICO policyholders will have to take a haircut. The longer it plays out will determine how low the cut.

The lack of a strong local and regional regulatory framework, the willingness of regulators to be intimidated by the political directorate, combined with greedy and corrupt politicians, have made the mess we find ourselves. While incumbent governments have the job of resolving the matter, the problems created by CLICO did not begin in 2008.  BU finds it amusing that BIPA continues to fight a losing battle to become a legal party to the matter which we all know is under the supervision of the Court. A reality is that opposition politics dictates that the government be blamed for the pace at which settlement is taking place. A downside to the matter being placed under judicial management is that all parties affected have to march to the beat of the Court. It is no secret our court system is labouring under some serious shortcomings which have likely impinged this matter. The level of political diatribe and emotional invective imparted to the CLICO Matter has guaranteed that in the minds of all concerned, whatever the settlement, many will be left battered and bruised when the final curtail is drawn far into the future.

A look at the complexity of CLICO’s Empire begs the question how did our governments and regulatory bodies fail to robustly regulate the company? Based on the findings so far of the CLICO Commission of Inquiry in Trinidad, Duprey managed the conglomerate like Miss Alleyne’s rum shop.  Sadly the problem of CLICO manifested in all of the jurisdictions in which it operated exposed two deficiencies – a poor regional regulatory system for monitoring pan Caribbean companies and the influence politicians have on an already weak system of governance fuelled by greed.

0 thoughts on “CLICO Weighed In The Balance


  1. For the proposal to work the governments of Barbados and Trinidad are expected to back the bond which amounts to close to BBD400 million.
    ***********************
    I heard Barbados alone portion was about $365 Million….and made to understand the others together ..were far more…..BTW. elections time nearing… just like I heard on the news yesterday.. a $40 million auditorium for Chris constituency St.Micheal West…and Kelly was supposed to revamp Manufacturing on 5 months….roads being fixed by Min. of Works…..less we forget the Integrity Legislation…why these things all a sudden in 4-6 months ….when we had 4 12 years..?..We only too well remember the AX teachers….any new promises for them ?


  2. We keep fooling ourselves, in order to fix the weak regulatory system, the courts, the problems in the education system, the Public Service and a host of other things we must first fix the problem of political interference and corruption in political office. Show me something that is going wrong in this country, and I will show you a politician behind the scene manipulating the process.


  3. @CASWELL
    I agree with you 100%.For each sin of commission and omission,you can safely point to a politician.Remember Cammie Tudor telling people in housing projects not to pay rent?DLP again..all for short term gain and long term pain
    @ONIONS
    Besides this “auditorium”,no doubt to be named the gibbs auditorium,Chris Sinckler informs Barbados that the DLP plan on building a secondary school east of Coverley.Only an nonthinking non planning person as the goodly gent would want to locate a secondary school in the vicinity of a busy airport with all the attendant noise pollution and all the carbon dioxide spent fuel discharge obtaining in this area.Silly DLP policy statements will be their undoing.”Fools, for I also had my hour,one far fierce hour and sweet”….with apologies to GKC


  4. One of the the things i learnt when i worked in an insurance company and bought my first insurance policy, wasthe fact that insurance is about risk, and, therefore, any person investing in an insurance company or financial institution should recognize that fact. Despite what , when investors get the sweets there is no reference to Govt, but when there is failue, every body wants govt to gurantee their investment, it cant and wont work.

    The great United Sates could not do it, and we of lesser mortals cant either. BIPA must stop making this issue a political one and recognize that Barbadian taxpayers are not prepared to foot any bill for them. How the hell June fowler can expect that those policy which have matured should be honoured. Where the hell the money is going to come from, and if that is done wouldnt it impact on the formula agreed upon for all investors. Yes people will counter that leroy Parris got his ,and i belive he should be dealt with for obtaining preferential treatment. But again, BIPA should recognoze that the party which she supports and which is encouraging her in her stance cannot take up our money to place at their disposals.

    If my memory serves me correctly, we had fincial institutions which failed over time; Narsham Insurance, Trade Confirmers and a branch of BCII and there were conseequences for those investors.

    This is a regional problem and there must be a regional solution, but we must recognize that investing is about risk and when there is sweet we suck it and when there is bitterness we taste it. I have always been told, that we should never put all our eggs in one basket, and i would advise any person to ensure that there is a basket of investment, whereby the risk being spread

    I wish all the investors well, but there might come a time when the court might have to impose an agreement. I am quite aware that this is being used by the opposition for politcal purposes, but if we back peddle we would recognize that the problem sid not start in 2008, like all thsoe massive corporate failures in america. They had their genesis under the previous administations. And by the way the tipping point came after the fractures could no longer sustain the corrupt systems.


  5. when investors get the sweets there is no reference to Govt, but when there is failue, every body wants govt to gurantee their investment, it cant and wont work.
    *********************************
    There is a BIG DIFFERENCE..when the Govt goes as far as to say..investments are SAFE…and even goes as far as( DT )to inject a further $10 Million of the tax payers monies… as a show of confidence…..then for Us taxpayers to later discover why…BIG BIG DIFFERENCE…


    • A government cannot guarantee the investments anyone has in a private entity. It is obvious Thompson – rightly or wrongly so – tried to bolster confidence in CLICO because he knew what a run on deposits could have done to ANY financial institution.


  6. @ David
    Great ! So don’t try to disconnect from the whole sordid affair afterwards. DT went and stuck his neck out even against opposition (Mia)…now the fallout comes, don’t play …”NOT ME I ent know” (Crimeson). What makes matters even worse now ..is the other unethical discoveries afterwards.Followed by the HUSH 3 by those n sundry…..Gimme a break …a blind man could smell a skunk…10 m off….We not blind and aint got na head cold either.


    • @Onions

      Absolutely not! The DLP will have to deal with the political fallout if any. Remember we have had a robust discussion on earlier blogs about the way Stuart (DLP) has managed the political dimension to this matter. Many, including BU, believes they have NOT. The recent CADRES poll validates our position.


  7. Bring on your daffodils and dandelions…such is your plan…But tell that to someone who had thousands invested, the old man around the corner who is about to be wiped out…ask them to consider your reprieve…better still tell them..they watching Fact of Life….in 3o mins it will end.Hold the rot….that no one is to blame especially…. Dr.WHO.The DLP will not wriggle out of this one unscathed as you all so wish.


    • @onions

      That BS will not work here. We have already admitted there is a political dimension to CLICO which will represent fallout for the DLP. It is your job to bring the emotive arguments not BU. Why don’t you tell us where the DLP will get the cash to pay everybody if returned to power. Save your lackey responses for the platform.


  8. Predictable you would avoid the question. Here is a hint, think Haggatt Hall. In the solution Arthur offered, a 100% settlement was not it. How would he intervene in the transaction? Would he tell the Court to go to hell?


  9. @David

    Sorry to join your debate, but as you said had the then PM not stated the investment was safe there would have been a run on the company and what would have happened to the company, it would have folded by now. Even though I now have my concerns about DT, I believe that he was advised that the comapny could have withstood the stress.

    Onions must recognize that his party was in power for 14 years and the statutory reserves were compromised for years, thus the problem could not have started in 2008, but long before. OSA was Minister of Fiance for 14 years should be cupable as he neglected his duties.

    It is unfortunate that some people can not raise their level of analysis because of their political blinkers, but we should be able to see things from all perespective instead of being naive in out thinking. Regradless of what we have written here, it is the floating voters that will decide and normally decide the outcome of elections.,


  10. @blogger2012
    Regradless of what we have written here, it is the floating voters that will decide and normally decide the outcome of elections.,

    ———————–

    You a re correct. Many of those floating voters have been affected in some way by CLICO. A private entity problem became a political one by the mouthings of DT, FS and CS combined. No government will (at this time) pump millions into any CLICO solution. Even though its not their problem to solve (yet), I’m curious as to what the BLP’s suggestions are on the issue. BIPA is wishing and hoping. Good luck to them.


    • Actually it is more than the floating voter this time around. It is the extent to which the DLP can energize its base because the BLP seems to be doing a better job doing it. As Peter Wickham affirms DLP support is greater.


  11. @David

    to some extent you are correct, i am not enrgize at this time. it it does not get a proper commucation strategy in place, i am sorry, but not voting might be the order of the day for me, even though over the years i admonsihed people for not voting. But a day in politics is a long time, so one never knows.


  12. David
    You should recognize by now that talking sense to onions is like talking to a rock.
    Onions is behaving like all Barbadians will just go out on Election Day and vote for the BLP and they will win all thirty seats. He must remember that that the last night before polling day 2008 the BLP had the biggest crowd in Bay Street and the next night they had the least seats.

    So onions relax yourself what will be, will be.

    I cannot see how it could be reasonable that big men and women could invest in these EPAs with such high risks and now expect all their money back with interest.

    Onions do not tell me about no Parris because I believe he, Noel Lynch and some others involved in the cricket world cup scam should be in that new Dodds prison


  13. @david
    I think DLP support used to be greater. 2008 isn’t an accurate picture of “base support” and we’re seeing a more 86/94 type election here. Also, the divided faction erodes any notion of a solid base plus we’ve seen Freindel’s inability to rally anything other than the staunch die hard supporter either through words or actions.

    I agree too that the BLP has the clear momentum, but, a day is a long time. If the DLP lets them get too far out the blocks though it’ll be all over. Take Ch Ch for example. A coordinated effort there would only leave Jones standing. Lashley and Lowe would be knocked out by the ripple effect of walcott and agard.

    An unresolved CLICO will always be a thorn. The BLP only has to replay the quotes and show the wine drinking photos, the political damage will be done.

    @blogger2012
    Sorry to hear that u may be joining the now 45%. that may be staying home. Hold strain, something may change your mind.


  14. Now before I put my finger tips to these keys..I scratched my head and said, “now what can I tell Clone that would cause him to honestly understand that there were not just people with a ‘lil excess ‘…who invested in CLICO and EPFR ‘s but ordinary pensioners whose monies were vested by companies to provide for their retirements .”These now destitute soles, some never even knew their pensions were put aside this manner. They had always believed that pension money was safe.You see Clonie this scandal is so large that almost all walks of life stand to be affected by the malfeasance.What has caused it to be a stinker is the before and after involvement of this DLP Govt in the whole topsie affair.Stinker still is that what was discovered by Deloitte should have been pursued…(like a shoplifter in Woolworth)..and attempts made of recovery for these poor once hard working people.You see Clone is was thru no fault of their own, but that of some greedy goggle eyed BIG FISH…who always believe that all in life is for them…..and some familes always FIRST. For me to come here and hear some callously say….who is not to blame ..and a willingness to want to apportion blame..almost caused me to fall off my chair. CLICO is a scandal of an epic proportion for the Caribbean, and because of our involvement ..in the manner born…cause much disgust and shame for me Baje.


  15. Let me for the record of those who do not quite understand what Reserves to be lodge with the (SOI) Supervisor of Insurance means..and once and for all do away with all these accusations of apportioning blame to the BLP for not maintaining the exact levels of Reserves.
    Required Reserves are set by Parliament and are monitored by SOI as a percentage of liquid assets LA (cash, short term investments, deposits.al kin).Let’s for argument say 10%…$100,000 = $10,000 to be held as Reserves.
    Since LA are continually changing from day to day at any of these institutions…at no time can Reserves lodged be the exact required amount given the number of new transactions going on with an insurance company DAILY. Therefore monitoring is but a continuous and arduous process requiring manpower..that is a very scarce resource for Govt. Now with the newly added FSC…we may be more adept.

    Of more importance is … required Reserves are but a small safeguard for investors’ monies….the real knave was off balance sheet financing….the moving around of the people’s vested monies….unimpeded by Govt intervention to do other financial things…But as we know it ..such is the latitude given to all companies. CLICO however, went overboard….and such should have been highlighted in then independent reports. Of course yet again ..there were other tings…lol


  16. David asks “What is the reason given to locate the campus in St.Lucy?”

    It seems to make sense to stop saturating Bridgetown with people.

    I have to believe that the campus in St.Lucy will offer the same programs as the other campuses and that it will be located on a bus route.

    This way students from the surrounding parishes can travel North.


  17. @Onions

    Was it known from the IMF Reports of the mid-2000 the Barbados government was warned about the need for institutional strengthening in the insurance and credit union sectors? When was the FSC established?

    But you are correct that the FSC was born as a result and it is still under staff in 2012.


  18. As you may recall, mere mention of the abbreviations IMF….was cause for skepticism and dodging. Policies proposed were always seen as another burden..hence the attention. FSC today born out of necessity ..as with most things here….need more manpower yes but more importantly bite..Now we step once more in the realms of Ross n Amused ….with associated problems…what the use of bringing a BIG FISH to court on a $1,000 charge ?


    • Let us face the reality, Duprey and Parris have enough money to frustrate respective governments in our Courts for years to come. It is what it is unfortunately. Our politicians need to paint this reality for the people and not leading then down a blind alley.


  19. @ David..REPRINT>
    The public is reminded that the offices of the Financial Services Commission (FSC) of Barbados, which were closed from Friday, April 1 to Tuesday, April 5, will be re-opened for business Wednesday, April 6, at its location in the Cotton Park Building, Walrond Street, the City.

    Additionally, the FSC is now responsible for regulatory functions that were previously undertaken by the Securities Commission under the Securities Act; regulatory functions that were previously undertaken by the office of the Supervisor of Insurance and Pensions under the Insurance Act and the Exempt Insurance Act.

    It will also be in charge of Pensions under the Occupational Pensions and Benefit Act and Regulation of Credit Unions.


    • On the subject of pensions you will be surprised to find out what they have done since start up.


  20. Institutional strengthening of the financial sector did not mean establishing the Financial Services Commission. It meant putting the resources (manpower and relevant training) in place so that the regulators could adequately do their duty. Instead this nincompoop administration rushed and established the FSC, as a statutory corporation, without the necessary resources so it can’t do the job, but the politicians now have undue influence in its operations.

    Already, the politicians have influenced at least one regulatory decision that I am aware of. So we can expect more CLICOs unless the politicians are removed from positions of influence in decision made by the FSC.


  21. @ Hants
    That’s not the case….just like the St.John Polyclinic, not very accessible by public transportation. As for offering the same classes…more teaching staff or tutors will commute between both locations? Imagine chaos and or more costs? Why not increase the density at SJPP Wildey? You imagine they still ‘expanding’ that site with chattel houses? Stupse


  22. i have to laugh when i read some of the comments here.

    Blogger wrote:
    One of the the things i learnt when i worked in an insurance company and bought my first insurance policy, wasthe fact that insurance is about risk, and, therefore, any person investing in an insurance company or financial institution should recognize that fact.

    ********************************************************

    with all due respect Blogger, are you mad? CLICO was mismanaged and not mismanaged in its investment but by greed. insider trading and all king of rhole? what appears to money laundering and you have the balls to type the shite you did? PLEASE!

    i’m sorry to the policy holders but i don’t think they should be looking to government for a hand out. i do think they should be suing government for its role in this mess.

    government should be going after the heads of CLICO. why should Parris not have face the courts for what is clearly fraud to a blind man? why has his assets not been seize?

    i hear people calling for the BLP to tell the people of Barbados what they going to do. i read Owen’s comments where he spoke about what government could do now to help the policy holders, what have we heard from government? not a cotton picking word.

    ********************************************************

    David wrote:

    Let us face the reality, Duprey and Parris have enough money to frustrate respective governments in our Courts for years to come.

    ********************************************************

    David while i agree with you, start the process but we have a government in the DLP who are playing buddy, buddy with Parris. this is the kind of joke we tell bajans and wait for them to laugh but one day coming soon, you wait and see. the old tell us, you could do whatever you like but not as long as you like


  23. @Blogger 2012
    Definition of ‘Off-Balance-Sheet Financing’
    A form of financing in which large capital expenditures are kept off of a
    company’s balance sheet through various classification methods. Companies will often use off-balance-sheet financing to keep their debt to equity (D/E) and leverage ratios low, especially if the inclusion of a large expenditure would break negative debt covenants.
    **********************************************************
    Pro. Persuad..Four Seasons fame, had recommended use of this method as the way to go with that project….Sarbanes Oxley Act saw otherwise…Enron 2002..was one causality….you can read more..en.wikipedia.org/wiki/Enron_scandal


  24. David Ellis reports… US$183 Million…..being siphoned out…..WHAT ???
    Get the scoop….hear for your self..(vid.2:20)…sound clean reporting to ECC’s


  25. June Fowler may have to face a new reality. If it becomes clear that the normal policy holders will have their policies with sagicor, her group may well begin to splinter.

    For me right now i am still in disbelief. The health minister moved on Mrs. Ram. Donville Inniss beast health minister since taitt:

    1, Moved on Mrs. ram;
    2. had the courage to reform drug service;
    3. has taken on doctors lobby;
    4. Clear improvements at qeh.

    Of course for the now regular BU bloggers anything that sounds like credit for the government is heresy.


  26. @Onions

    I know what is off balance sheet financing, again please answer my question. Thanks in advance.


    • @Blogger

      Of course the part you have neglected to factor, often discussed on BU, is the political dimension.


  27. @David not bu

    regardless to what you say or think, investment is about risk, even if the company is mismanged, thats apart of the risk. So please let it sink into you brain and remain there


  28. @ Blogger
    I know what is off balance sheet financing, again please answer my question. Thanks in advance.
    ****************************************
    Then you should know the answer…….or are you up to something nasty ?……As is Sunday….I only play golf on Saturdays….but when I find people who hum bug me on Sundays I make an exception…..play golf or the poor man guillotine ? Choose wisely .


  29. @David
    Some would like to pretend that the political dimension doesn’t colour practically EVERY policy and financial decision made by a government. To understand the politics helps to understand the motive, direction and intent, be it good or bad.


  30. With the Nation newspaper as the public relations agency for the BLP Campaign, we can fully expect the CLICO issue like so many others to be covered in a one sided partisan way.
    A more objective discourse would also examine the role of the current opposition leader: any statements that he is now making which conflict with what he failed to do with CLICO oversight when he was PM or any donations or soliciting of donations that he was trying to get from the same CLICO.
    Then Barbadians could examine both sides and make a decision. But on all the issues of the day, the Nation newspaper seems content to repeat the BLP talking points and play their obvious role in skewing public opinion towards the BLP.
    The motive of the Nation newspaper is clearly to promote the BLP interests and you will see a white Christmas in Barbados before you see any Nation columnist launch a critique of the current opposition leader.
    You will have to constantly check the blogs and a variety of sources to get a more accurate picture.
    If you depend on the Nation newspaper alone for your information, you are doing yourself a great injustice. It is like looking for balance on Fox news in the USA.
    Journalistic integrity and independence has been compromised at the Nation newspaper. The top brass of the BLP has total control of that newsroom and its columnists.


  31. The crocodile …..eat Blogger 2012….DEM aint so BIG in trinidad….she did overwhelmed……she gone fa natural gas….I hope she doan CUM back…


  32. I repeat for you Clone…I still await a reply

    Now before I put my finger tips to these keys..I scratched my head and said, “now what can I tell Clone that would cause him to honestly understand that there were not just people with a ‘lil excess ‘…who invested in CLICO and EPFR ‘s but ordinary pensioners whose monies were vested by companies to provide for their retirements .”These now destitute soles, some never even knew their pensions were put aside this manner. They had always believed that pension money was safe.You see Clonie this scandal is so large that almost all walks of life stand to be affected by the malfeasance.What has caused it to be a stinker is the before and after involvement of this DLP Govt in the whole topsie affair.Stinker still is that what was discovered by Deloitte should have been pursued…(like a shoplifter in Woolworth)..and attempts made of recovery for these poor once hard working people.You see Clone is was thru no fault of their own, but that of some greedy goggle eyed BIG FISH…who always believe that all in life is for them…..and some familes always FIRST. For me to come here and hear some callously say….who is not to blame ..and a willingness to want to apportion blame..almost caused me to fall off my chair. CLICO is a scandal of an epic proportion for the Caribbean, and because of our involvement ..in the manner born…cause much disgust and shame for me Baje.

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