CLICO LIGHT

SUNDAY SUN MARCH 2, 2014

CLICO LIGHT

by RICKY JORDAN

CLICO POLICYHOLDERS MAY be getting a dream offer from a North American firm, which wants to buy all of the assets of Clico International Life (CIL) Insurance Limited and repay the principal sums to the policyholders and investors in Barbados and the Eastern Caribbean.

The North American firm has been meeting with CIL’s judicial manager (JM) Deloitte Consulting Inc. as a result of correspondence going back to 2013.

The offer to purchase CIL’s $800 million-plus in assets, including large tracts of land, and ensure policyholders receive over $441 million, was contained in the proposal sent to the JM and Minister of Finance Chris Sinckler recently.

Delivered two days ago to Deloitte, the document obtained by the SUNDAY SUN confirmed the firm’s commitment that policyholders in Barbados and the Eastern Caribbean be restored their principal investment or “made whole for their principal”.

The prospective investors propose to rebrand the company, acquire all of the assets of CIL and ensure that the Government of Barbados achieves its own objective.

Asked why Barbados, a reputable source told the SUNDAY SUN that the woes of CIL were made known to them by an American-based Barbadian businessman.

However, the source added, they also knew that a local insurance company wanted to buy some of the assets, particularly land. “But that would hurt the policyholders very badly. This is a far better offer,” said the source.

“The company would be buying CIL lock, stock and barrel and have the financial capability to satisfy all the parties.” He added that the firm was a billion-dollar operation that had been doing business since the 1970s.

“Barbados has Trade Confirmers behind us and one doesn’t want that to happen again, not in the 21st century, especially when there are opportunities to avoid it,” he added.

The SUNDAY SUN understands that the company’s partners include some of the largest North American financial entities. Recently, Central Bank Governor Dr Delisle Worrell told regional media that a cooperative solution had been found to settle outstanding CLICO claims in Barbados and the Eastern Caribbean.

He said the latest report from Deloitte made to the court here provided a way forward which seemed fair to all stakeholders. CLICO and its sister company, British American Insurance Company (BAICO), collapsed in 2009, and on February 4, 2011 the Supervisor of Insurance in Barbados announced the appointment of a judicial manager.

Last July, the JM informed policyholders and other stakeholders that it had presented its final recommendations to the High Court, and based on discussions with the Ministry of Finance and the Central Bank of Barbados and subject to Cabinet’s approval, it was proposed that a new company be established to hold CIL’s portfolio of traditional insurance business and the restructured Executive Flexible Premium Annuities (EFPAs).

The ultimate aim is to create a viable insurance company which could be sold to an investor insurance company, and the decision on this matter is expected to include the approval of policyholders and investors.

The total value of the policyholder liabilities to be transferred to the new company was put at $542 million, consisting of $275 million of liabilities from Barbados and $275 million from the Eastern Caribbean Currency Union (ECCU).

The JM also presented a forensic report to the court but its scope did not cover all areas of CIL’s activities.