CLICO cut off from dividend funds
Cash-strapped CLICO International Life Insurance Company Limited has found itself cut off from about $1 million in funds.
As Barbadian policyholders continue to be frustrated by their inability to recoup money from the failed insurer, St Kitts-based Eastern Caribbean Home Mortgage Bank (ECHMB) has been withholding dividends due to CLICO.
Authorities here have been pursuing a “Barbados first” solution. But the MIDWEEK NATION learnt that mortgage bank, which is partly owned by CLICO but is also one of the insurer’s creditors, has initiated its own fix.
On March 14, 2007, The Home Mortgage Bank of Trinidad and Tobago sold its 20 000 shares to CLICO Barbados, giving CLICO a 7.44 per cent shareholding. The Home Mortgage bank subsequently purchased an Executive Flexible Premium Annuity worth $3.7 million.
These “term deposits” matured in October 2009, about eight months after CLICO collapsed. Two years later the Home Mortgage bank was informed that CLICO had been placed under judicial management. Individual policyholders and investors, not institutional annuity holders have been prioritised in the process.
Investigations found that not only has the Home Mortgage bank accepted that it was unlikely to recover the full debt, if any, from CLICO, but it decided not to pay dividends to the Barbados-based company.