Report shows CLICO clients surrendering and abandoning policies

As CLICO International Life Insurance (CIL) faces possible liquidation, a report submitted to the court has shown that lawyers and actuarial consultants hired by the judicial manager were paid more than half million dollars last year alone.

That was in addition to the more than $8 million the judicial manager was paid up to June last year.

The information was contained in the December 12, 2014 report of the judicial manager, Deloitte Consulting, that took over the company in 2011. The report has only now been made available for public viewing.

Patrick Toppin, partner at Deloitte Consulting which has been serving as judicial manager for CLICO since 2011.
Patrick Toppin, partner at Deloitte Consulting which has been serving as judicial manager for CLICO since 2011.

This latest report revealed what the independent legal counsel and the independent actuarial consultants have so far received out of CIL’s assets, as well as the fact that the judicial manager’s professional fees and expenses were close to $9 million at June 2014.

The report gave a summary of the non-medical policies in force.
The report gave a summary of the non-medical policies in force.

“The judicial manager engaged independent legal counsel to assist in its management of the estate and to address asset recovery and defence matters on behalf of CIL and the judicial manager . . . The fees of the judicial manager’s legal counsel, Clarke Gittens Farmer, from January 1, 2014, to November 30, 2014, are $287,950, together with expenses of $470 and VAT in the amount of $50,391 total $338,811,” it said.

The 26-page document also noted that one Oliver Wyman was hired as an independent actuarial consultant to produce actuarial valuation of policyholder liabilities as at March 31, 2012 and December 31, 2013.

“The total fee of Oliver Wyman from June 22, 2014 to November 30, 2014 is $241,251,” it disclosed.

That valuation put liabilities at $368.5 million.

The report also showed that the collapsed company had been experiencing steady declines in the number of traditional life policies kept in force between December 2011 and November last year.

The document, which is an update to the August 25, 2014 interim report, revealed that in December 2011, CLICO had 13,259 individual life policies in force. However, by November last year that number plummeted to 8,820.

The company has also been suffering from declines in valid Flexible Premium Annuity plans – from 7,214 to 6,392 – during the same period.

The report also stated that the number of non-medical policies dropped from 20,473 to 15,212.

More than 23,000 policies were surrendered during the December 2011 to November 2014 period.

In total, the dollar value of the policies in force steadily decreased, moving from $728,583 to $571,379.

In its report, the judicial manager recommended that the High Court make an order terminating the judicial management of CIL and ordering that the company be liquidated “for the general benefit of policyholders and other creditors”.

The judicial manager also wants the High Court to appoint it, once liquidation is ordered, as liquidator.

The Government of Barbados has already indicated that going the route of liquidation would be premature and unwarranted, while the Barbados Investors and Policyholders Alliance is also resisting liquidation.

5 Responses to Slipping

  1. Adrian Reid
    Adrian Reid March 3, 2015 at 1:10 am

    242 you ain’t wrong

  2. Tony Webster March 3, 2015 at 6:42 am

    Amazing, that in the land where the Commonwealth’s first, ground-breaking, and Mutually-owned Insurance company was formed by Royal Warrant, and prospered for a few hundred years, that we here have strained at an elephant…and produced a poster-child of shame/greed/mis-management/and chagrin.
    Not everyone involved is going to lose their shirt- or skirt. Some lucky professionals who “first sup from the cup”, are smiling…all the way to …the history-books. And apparently, wish to continue so to do…to the last drop…or dollar.
    What a strict teacher experience is! No wonder that “history”, whether it be passed-down in writing or by word-of-mouth, is so vital to the next generation. That’s why I yet remember my Ananci stories!

  3. Alec Pierre March 3, 2015 at 9:03 am

    While I partly agree with Tony Webster, it must be agreed that the JM was not working pro bono. I think the larger and more important question is why did it take so long after the collapse for the government to appoint a Judicial Manager. Bearing in mind that there was.some $300 million discrepancy that the JM was unable to explain for lack of documentation, how, why, when and to where did that $300,000,000.00 vanish?

  4. Bobo March 3, 2015 at 11:30 am

    From Government to its disciples–”’Money the root of all evils”

  5. Andrew The Voice March 3, 2015 at 6:22 pm

    Seems like parasitic behavior to me.
    Aren’t the Managers of the Peoples money NOT responsible for the peoples money. So they have NO accountability for the results of the peoples money, yet they have millions stashed away? Seems a bit dubious to me.


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