Another Heather Cole Column – JERK HAM AND BALONEY
Just before Christmas 2017, the Print Media published an IMF Report that had been commissioned by the Financial Services Commission (FSC) of Barbados on the Supervisory Framework for Sagicor Life Inc. The report revealed the dismal state not only of the Insurance Industry but for the FSC itself. It alluded to the lack controls, of compliance, oversight; of an agency not equipped or staff trained; and without technical expertise and knowledge. In other words the report stated that the FSC has a mandate that is above its capacity to implement.
The FSC did not disclose the contents of the report which was subsequently published by the Print Media. The Chairman of the FSC, Dr. Frank was quick to berate the Press for making the report public; for disclosing the damaging and secretive report.
The events that led to the publication of the IMF report are somewhat disturbing. The IMF came to Barbados and their consultancy lasted from October 9th to 13th 2017 and the Report was issued on October 13th 2017.
On Friday December 11, 2017 the Minister of Finance informed the House of Assembly that all the operations of CLICO would be transferred to a company Resolution Life Insurance Limited (ResLife) by December 31, 2017. He also stated that the process by which the assets and liabilities would be transferred would commence in January 2018. He also stated that government would “issue bonds to facilitate the restructuring of CLICO, preserve the investments of policyholders and transfer the real estate assets to New Life Investment Company (NLICO).”
Firstly, it is regrettable that the Minister of Finance chose to ignore the recommendations of the IMF. If there is no credible oversight for the Insurance industry why choose to go ahead and create a new company that will operate under conditions where the industry is a law unto itself? Why choose to continue operations within the same environment that caused CLICO to fail. Why choose to continue when the IMF has warned that Sagicor has the propensity to fail.
Putting the proverbial new wine in old skins will only cause the old skins to burst. One cannot expect to reap success with any new insurance company in Barbados that exists under the same old rules.
Secondly, based on the timeline it suggests that even though he was warned by the IMF on October 13th 2017, the Minister hurried to Parliament with the Resolution. In his haste, he also did not state who the owners or principals of NLCIO or who the owners or principals of ResLife. There was no mention of the relationship between these two companies. It is therefore unclear if the present policy holders of CLICO will have a stake in the real estate assets once the new company NLCIO is formed. I have not read the CLICO International Life Insurance Resolution so I am therefore not in a position to discuss any further based on the contents of the Resolution.
What stands out in my mind about this debate is Maxine McClean ranting and raving about the Resolution preventing vultures from getting their hands on CLICO’s lands. To me that was a big red flag and I wondered if it was the lands of CLICO that made the Minister of Finance disregard the recommendations of the IMF that were intended for the well- being of the industry to give the lands to his friends.
Thirdly, could it be that the Media’s publication of the IMF Report actually thwarted the secret Christmas gift of Jerk Ham and Baloney? If so, the swift actions of the Minister of Finance had nothing to do with the policy holders of CLICO but to ensure that the title deeds would be delivered well before the next general election.