THE JUDICIAL MANAGER of CLICO International Life Insurance Ltd may be challenged in valuing and recovering that company’s assets as some supporting documentation is missing.
Deloitte Consulting Ltd represented by Oliver Jordan and Patrick Toppin said accounts provided by the company as at April 13, 2011, showed that assets totalled $802 million.
This consisted primarily of amounts due from related companies and investments in subsidiaries and associated companies.
However, according to Deloitte’s Interim Report To The High Court of Barbados dated May 27, 2011, it had so far only been able to access and review documentation to support $446 million of the reported assets.
“The judicial manager noted that the ultimate solvency of the company is dependent on the realization of its assets, particularly amounts due from related companies which themselves are in financial distress.
“Many of the underlying assets of the related companies have already been pledged towards statutory trusts that company is required to set up in various jurisdictions in which it operates and which appear to be currently underfunded,” the report stated.
The judicial manager noted the total liabilities reported by the company as of April 13, 2011, were stated as $768.4 million and included reserves of $695.1 million for policyholders’ funds.
However, an updated actuarial report as of December 31, 2010, was received on May 15, 2011, and this recommended that reserves of the company be $828 million.
Deloitte commissioned an independent review of the company’s actuarial report, the results of which indicated some concerns about the assumptions and approach adopted by the company’s previous actuary.
The judicial manager then decided to do further investigation to determine whether other adjustments were required in the amount of reserves for policyholder liabilities.
Deloitte said the company’s Executive Flexible Premium Annuity (EFPA) policies represented approximately 60 per cent of the actuarial reserves at December 31, 2010.
The EFPA balance at April 4, 2011, was $507.5 million representing 1542 individual policies and 267 corporate policies.
On July 28, 2011, Deloitte submitted its final report to the High Court setting out its findings and recommendations.
