CLICO LIFE’S WAY
By Geralyn Edward | Thu, June 03, 2010 - 1:53 AM
Put CLICO International Life Insurance Company under judicial management.
That will be the recommendation of the Government-established Oversight Committee, said chairman William Layne.
In an exclusive interview yesterday with the DAILY NATION, Layne, who is also permanent secretary in the Ministry of Finance, said there were only two options left for the beleaguered company following several failed attempts to find a buyer.
He said that under the Insurance Act, CLICO International Life would have to be wound up or put under judicial management.
The permanent secretary said winding up the operations of CLICO Life would mean “you bring in an undertaker [receiver] and he sells off the assets at whatever he can realise. And in this market, with a lot of real estate holders, can’t say what they would get aon the dollar.”
However, Layne said: “The best option is to restructure CLICO Life under judicial management and sell [it] to a strong company.”
The Oversight Committee’s life comes to an end on June 12, said Layne, after being extended by Prime Minister and Minister of Finance David Thompson.
“At the end of that period . . . we will have our recommendation for the minister as to what we feel is an option. I can speak frankly and tell you that we are saying that the life insurance company will have to be put under judicial management.
“That is the only way that you can achieve a proper restructuring,” the top Government official said. Layne was among several Government, credit union, legal and regulatory officials at the offices of Barbados Public Workers’ Co-operative Credit Union Limited (BPWCCUL), Belmont Road, St Michael, yesterday for the sale and purchase agreement signing between BPWCCUL and CLICO Mortgage & Finance.
BPWCCUL moved closer to buying the CLICO Holdings Barbados subsidiary after months of negotiations following the sale and purchase signing.
The Oversight Committee was established early last year and mandated to find buyers for CLICO International Life, CLICO Mortgage & Finance and CLICO General Insurance.
The Oversight Committee has only found success so far with the sale of the mortgage company. After indicating its interest in buying CLICO Life last year, the Insurance Corporation of Barbados Limited walked away from initial talks.
Last month, Consumers Guarantee Insurance also walked away from its plan to buy CLICO General Insurance.
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Mr. Layne,
Your two options are correct but the issue is not for our Government to restructure a private company. That’s not the role of government in a small economy.
When a company fail other companies will take its place. That’s how market economies work.
Our governement must focus on its deficit and debt.
Insurance comapanies are in the business of managing risk, not investing in instruments they don’t understand.
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