Nine years after CLICO meltdown, compensation begins
Roughly nine years after the spectacular collapse of Trinidad & Tobago-based insurer Colonial Life Insurance Corporation (CLICO), some policyholders have begun receiving payouts, starting with would-be pensioners, as part of a six-month process to clear the backlog carried out by Resolution Life (ResLife).
This comes following ResLife's absorption of CLICO's portfolio in January, with average payouts to annuitants of BDS$400,000 (US$200,000), local media quoted ResLife CEO Cheryl Senhouse as saying.
"We are elated that finally payments are being made [so] we are coming good with our promise to make our policyholders whole again," said RenLife chairman Clenell Goodman in the report.
Senhouse, as reported by news outlet Barbados Today, stressed that while ResLife was still assessing a proposal to renegotiate the reinstatement of lapsed policies, its priority was on servicing those who had stuck with the company and continued to pay their premiums.
"Our immediate priority though right now is to deal with the persons who . . . held on during the time of the judicial management and ensuring that those persons continue to pay their premiums and so on, that they are the ones who immediately are able to reap the benefits of the portfolio coming over to Resolution Life," she stressed. Soon the company would assess the options available to people whose policies had lapsed during judicial management.
Getting back on track
Gross mismanagement and weak liquidity regulations led T&T's central bank to assume control of CLICO in January 2009, at the start of a collapse that would cost T&T taxpayers US$3bn and send shockwaves across the region, especially in Barbados.
Announcing the development, Barbados finance minister Chris Sinckler said the firm decided to begin payments to recipients in Barbados first and expects to compensate policyholders in the Organization of Eastern Caribbean States (OECS) next.
"We decided to go with the Barbados first option, and not the Barbados-only option, because the restructure proposal was for the entire CLICO portfolio," he said.
New regulations should avoid repeat
Sinckler also assured the new company of the Barbados government's continued backing, noting that this was only part of a wider restructuring of the financial services and regulatory system.
"We are going to help them along the way because we have made substantial changes in the way the regulatory system works," added Sinckler. "We passed the Financial Services Commission Act, we have incorporated many of the legacy bits of legislation under there, including the Insurance Act of Barbados," the minister stated, adding that the financial services commission had assumed the functions of the insurance supervisor.
He suggested that the CLICO debacle ought not happen again if good regulation, "appropriately-operated companies" and public vigilance were maintained.
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