EDITORIAL: Clear answers can help
We continue to hear of possible solutions to the CLICO Barbados problem, as the Trinidad’s own CLICO exposures dominate our news: how the company and its subsidiaries were managed, and how decisions were made within the corridors of corporate power in the group.
It was exactly three years ago today the news broke that the group was in financial trouble; and if, as a recent local news report stated, there is now light at the end of the tunnel for local policyholders and investors, we welcome such news, and we hope that success attends.
All Barbadians will be happy when this CLICO?matter is laid to rest; and the best efforts of corporate partners and political entities – in and out of Government – must be brought to bear on the resolution of this saga.
The evidence coming out of the Trinidad CLICO probe provides important lessons for us all – insurance executives and policyholders – even though we may not be clear how exactly the head office in Port of Spain and CLICO Barbados were intertwined, except for the fact one was the parent of the other.
Over and above any settlement of the issues, the public interest and confidence in local financial institutions will be enhanced if clear indications are given as to the cause of the collapse of the local company.
If as it turns out CLICO?Barbados was lending money to the parent, then we need to know how and if it can be recovered.
So far, no one has been able to show that the local motor insurance firm or the mortgage company was not well managed, or that the problem is to be found in the life insurance operations.
Nor can any one deny the immense energy and drive of the local agents and insurance salesmen in their pursuit of the sale of their company’s services.
Not so long ago, CLICO Life in Barbados was a single-door operation; but the entrepreneurial drive and capacity of a team of Barbadians, led by Leroy Parris, would create a cadre of exemplary underwriters, which would augur well for the service industry and ultimately for the company.
And that is one good reason why we must find out what went wrong at the CLICO Barbados end, because if the “hole” in the local company was caused by inter-company loans, then we must apply the appropriate regulatory framework to make sure this never recurs in any other similarly regulated company.
And if there are other reasons for the CLICO?collapse, of the remotest different nature, we must know also.
We must be aware of whatever the source of downfall is.
And the Government must immediately strengthen the expertise available to it, or if none exists buy it; for our economy cannot adequately withstand such shocks, as suffered by the CLICO debacle, with any frequency.
A generation ago, the Trade Confirmers and BCCI collapses shook the confidence of our small developing investment market, and just as it was recovering and confidence was being restored in the minds of investors and savers, the CLICO challenge threatened to undermine and shatter it all.
We must not let this happen; and the local authorities must take the lead in ferreting what exactly happened to shake the foundations of the local CLICO group.
This past week, former Central Bank of Barbados Governor Dr Courtney Blackman opined that to safeguard the local economy we needed to pay attention to the banks, the insurance companies and the credit unions.
Knowing what went wrong with CLICO will help us better regulate our financial services sector.