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Local regulators rapped


Geralyn Edward

Local regulators rapped

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ALMOST?A?YEAR of unregulated CLICO operations in Barbados is worrying recently retired permanent secretary in the Ministry of Finance William Layne.
What’s more, Layne said it was an indictment of Barbados that to date no one has been hauled before the law courts over the CLICO debacle.
The head of the now dismantled Oversight Committee on CLICO Holdings Barbados Limited told BARBADOS BUSINESS AUTHORITY in a recent interview that since the committee’s mandate expired last June, there had been no oversight of CLICO International Life.
“The Oversight Committee’s mandate expired last year and it is almost June again and there was no oversight in the CLICO Life during that period – nobody knows what has been happening.”
CLICO’s parent company CL?Financial, he said, was “characterized by a lack of governance at all levels” and he had little evidence that led him to believe the Barbados company employed high standards in doing business.
Moreover, Layne said, “The difficulties of CLICO here demonstrate a lack of corporate governance and a weakness on the part of the people who are supposed to oversee the corporations. I am talking about the boards of directors.
“Boards of directors are to be made accountable for the actions of corporations that they direct.
Layne, who is known for his frankness, said the Oversight Committee appointed by Cabinet in 2009 did not at first realize the enormity of the financial situation facing the company. He said attempts to get certain important documents were thwarted on occasion.
He assessed that the formula employed by CLICO was doomed to fail as the company faced a massive asset-liability mismatch.
Layne, who served more than a decade on the board of the National Insurance Scheme, blasted some local regulators, describing them as weak.
He said the insurance industry must not only “have good regulation but also strong people regulating it. It goes back to my earlier point about people not having the guts to make strong decisions”.
Layne was also adamant about Government not bailing out investors in CLICO’s controversial Executive Flexible Premium Annuities.
“The role of the state is not to bail out stupid professional people and institutional investors who have a responsibility to do the necessary due diligence. The little old lady who was duped, if she was duped by an agent – yes – and then you send the agent to prison.
“But there is no way that lawyers, bankers, doctors should be bailed out for making a business decision purely on the basis of interest rates and returns.”

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