Stop stalling!

Government told to take care of CLICO’s poor

With Government and CLICO’s judicial manager said to be close to signing off on a firm agreement, they are being told to stop stalling and pay policyholders right now.

Chairman of Goddard’s Enterprises Charles Herbert issued the stern advice during a Barbados Labour Party-sponsored People’s Assembly panel discussion last night at which he got strong support from retired permanent secretary in the Ministry of Finance William Layne.

Goddard’s Chairman Charles Herbert
Goddard’s Chairman Charles Herbert

Layne, who is a director of the National Insurance Scheme, agreed with Herbert that there was money available to pay policyholders at least a portion of what they are currently owed, but they complained that the process, which started  back in 2009, was taking way too long to reach a settlement, while investors were suffering as they waited word on their investment.

Former permanent secretary in  the Ministry of Finance William Layne
Former permanent secretary in the Ministry of Finance William Layne

“CLICO has roughly 50 cents on the dollar to pay everyone, and for a couple of years now we are not giving people that 50 cents, and every year that we don’t give them that 50 cents it becomes 45, 40,” said Herbert, who is also a professional estimator of insurance risk and a principal at Eckler Partners Limited.

“Regardless of the solution of finding the other 50 [cents], give people the money that we have there for them now, and stop wasting it,” Herbert said.

Layne also suggested that “if there is sufficient money to pay people 50 cents on the dollar, pay them now”.

Pressing the case for payment of ordinary shareholders, Herbert said, “I don’t have the exact statistics, but I think I’m right. At least half of the money that is lost, is lost by people who had more than $1 million deposited with CLICO.

“Those people are not going to the breadline because they get back 50 cents on the dollar, and they are not the people that the public of Barbados should be having to bail out.”

He further contended that the large investors simply made business decisions that went wrong, but the ordinary shareholders were the most vulnerable and in need of their money now.

“We need to bail out the poor people who are in CLICO and that would not cost us as much as trying to bail out everybody,” he stressed.

However, Herbert’s suggestion did not go down well with former tourism minister Noel Lynch.

“I wouldn’t like Charles to just dismiss everyone who invested in CLICO as having made a bad investment, and only seek to look after the people who were the poor and the vulnerable that were involved in the investment,” Lynch said.

“I wouldn’t like it to be said here that only people who were poor people should be compensated. There are a lot of other people too who have invested monies and are dependent on those monies for their own welfare and the future, and I think they should also be looked after and Government has a responsibility to them.”

Lynch’s argument was that investors, regardless of size, trusted the CLICO investment because it was regulated by a government agent, the Supervisor of Insurance.

“If CLICO was selling a particular product, like all insurance companies and all financial institutions do, and Barbadians made an investment in that, whether they had a dollar or $1 million . . . Government cannot walk away . . .  because it was a legitimate product that CLICO was selling and should have been regulated better by the Supervisor of Insurance.

“So therefore the Government has a responsibility to those people as well.”

Also commenting on the situation, Ed Bushell, the president of the Barbados Association of Retired Persons, which represents the interests of persons over 50 years of age, said, “We are still very concerned about CLICO because many members [of BARP] are members of CLICO, and we are looking very carefully to see what the outcome of that particular fiasco will be”.

Barbados TODAY understands that Government and the Judicial Manager Deloitte Consulting are in the process of finetuning an official statement which will be issued on the matter shortly.

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