March 13, 2009

More assurances are being given regarding CLICO, the troubled conglomerate, which has, over the last few weeks, been making investors and policy holders nervous all across the region.{{more}}

The latest assurance came following a special meeting of the governments of Barbados, Trinidad and Tobago and the Eastern Caribbean Currency Union (ECCU) countries held at the Barbados Hilton on March 4.

In the communiqué issued following the meeting, the governments agreed to explore all options to ensure that CLICO and British American insurance companies have the ability to service all their clients.

The meeting, which was chaired by Prime Minister of St. Vincent and the Grenadines Dr Ralph Gonsalves, agreed to establish a fund to provide liquidity in order to reassure policyholders and boost confidence.

The CARICOM Petroleum Fund is also being looked at as a source of financing for this fund.

The leaders also agreed that the region’s financial regulators will form a special task force to determine the full extent of the situation; that is the policyholders and depositors’ obligations against the adequacy of statutory funds and statutory deposits.

Following the meeting, Barbadian Prime Minister David Thompson said that it was clear that “There needs to be more contact between the regulators so that they can verify the accuracy of information, so that they could share information about the adequacy of statutory funds or assists owned by insurance companies.”

After news of the situation in Trinidad broke, Chairman of CLICO Barbados, Leroy Parris, visited this country and blasted the media for instilling fear in people, and did all but kneel down and promise that all is well.

He even went as far as to say that CLICO Barbados could not find itself in the position of its Trinidad and Tobago counterpart, because they operate differently.

Not too long after his reassurance, it was learnt that CLICO Barbados had racked up millions of dollars of Statutory Fund deficit over the last few years.

Arrangements had to be made to sell off the life insurance arm of CLICO Holdings to address the problem.

This sale is a move that Barbadian Prime Minister Thompson declared forms part of a new and “radical” approach being taken by various players, including his government, to protect the interests of workers, investors and pensioners in the company.

The fallout from CLICO’s troubles is being felt all over the region.

In Guyana, teachers are facing the threat of losing their health insurance and other securities, as President of the Guyana Teachers’ Union Colwyn King admitted that “more than a decade of investments are in trouble in some cases.”

The Supreme Court of the Bahamas ordered that CLICO (Bahamas) Limited be placed in liquidation, in an attempt to protect the interest of the policyholders.

In the Turks and Caicos Islands, CLICO has been forced to close down, local media reported.

While all this was going on, regional leaders have been coming out with assurances – an attempt to prevent pandemonium.

And from the decisions coming out from the last meeting in Barbados, it seems as if the leaders are determined to keep the situation in check.

“There was an expressed determination by all…that everything would be done to ensure that the financial system in the region would be strengthened, its integrity maintained and upheld, and together we will further build trust and confidence in that financial system,” Dr Gonsalves told the media following the meeting. (KJ)