Update March 2 - I was listening to Prime Minister David Thompson last night on CBC. He keeps assuring us that the bailout money will stay in Barbados. I don’t have a transcript, but this is my interpretation of a part of Mr. Thompson’s speech:
The Central Bank of Barbados monitors CLICO’s banking companies.
The Supervisor of Insurance monitors CLICO’s insurance companies.
The rest of the CLICO companies are private companies and are not monitored by anyone.

Thompson went on to blame the BLP for their continued negligence with regards to CLICO.


(Update Feb 21 - This article has been updated today with very important input from both the leader of the opposition and the Prime Minister. It has been moved from BMLA where it was previously published.)Jamaica Gleaner, February 11, 2009 - CLICO downgraded, put on negative watch - Barbados, Bahamas subsidiaries also weak

Colonial Life Insurance Company Trinidad Limited (CLICO) has been placed on review [by AM Best], with the possibility of further downgrade as Trinidadian authorities assess just how bad a financial position the insurance company is in.

Barbados Central Bank Bailout

A Barbados subsidiary has also started to show signs of weakness. Last week, the Central Bank of Barbados deposited up to BDS$10 million (US$5 million) with the CLICO Mortgage and Finance Corporation (CMFC), and gave the company access to a new government facility in the event it needs added liquidity support.

 

Is Barbados Money Going to Bail Out Trinidad?

Capital Chronicle, February 04, 2009 - Trouble in paradise: CL Financial, Trinidad and Barbados

For example, the accounts for the group’s Barbados-based insurance operations for the entire eastern Caribbean (Clico International Life insurance Ltd) show loans to parent and ultimate parent companies of over US$50m, more than 10% of the insurers’ asset base.

A wheel within a wheel! If Trinidad CLICO goes under, what happens to Barbados? Could there be a chain reaction causing CLICO HOLDINGS (Barbados) Ltd to suffer major losses? Read the Capital Chronicle article above and decide for yourself.

 

Whom Does the Bailout Benefit?

Recently Barbados Free Press (BFP) asked this question:
BFP, Jan 30, 2009 Clico On Life Support - Will Barbados Prime Minister Thompson Favour His Patron Leroy Parris, Or The People Of Barbados?

A year ago, BFP made a prognostication:
BFP, Feb 21, 2008 - Was The Corporate Jet Properly Paid For By Barbados… Or On Loan For A Future Favour To Leroy Parris Or Others?

A year after the BFP post, the Thompson administration is bailing out CLICO.

 

Mangrove Wetlands Endangered

It appears that CLICO is planning to build condos by Graeme Hall. The Graeme Hall Swamp is the last remaining Mangrove wetlands area in Barbados. I wonder how environmentally-conscious Bajans feel about their tax money being used for this purpose?

 

Maybe Nature Will Lose and Trinidad Will Benefit

My interpretation of the Capital Chronicle article is that while some of this Barbados Government bailout money will be invested locally, a great deal is making its way to Trinidad!

 

Update: PM Thompson Addresses CLICO Issue

CBC, February 20, 2009 - Thompson raps Arthur on CLICO issue

Mr. Thompson is quoted as saying:

“… he [Owen Arthur] praised the management of the CLICO in the presence of both Mr. Duprey, Mr. Parris and the Deputy Prime Minister and others and said he was completely satisfied with the operations of the institution which was very well managed.”

Here is another quote from the article:

In a media release issued Friday, the company stressed that its compliance has been verified by the Regulator of Insurance Companies in Barbados.

CLICO International Life says the company is solvent, and no funds from CLICO Barbados will be diverted to CL Financial in Trinidad, since any movement of funds is well regulated by the Central Bank of Barbados.

 

Who is the Regulator of Insurance Companies in Barbados?

The Nation Newspaper published a story STAY CALM (2/1/09) that identifies Carlos Belgrave as the Supervisor of Insurance.

Back in 2007 Mr. Belgrave warned us to ‘Be on lookout for launderers‘. In 2006, Offshore Alert and KYC (Know your client) News voted Carlos Belgrave as the worst insurance regulator. The “OffshoreAlert Awards - Best & Worst of 2006″ can be purchased from the KYC News Story Library. Here is a peek at the report:

KYC News

Should we listen to Supervisor of Insurance Carlos Belgrave? His department falls under the Ministry of Finance. Prime Minister Thompson is also the Minister of Finance. Opposition leader Mia Mottley is asking questions, but was not Carlos Belgrave under one of her ministries recently? He has held his current post since 2000.


Related:

  • Breaking News - BLP website, 2/20/09 - Can’t Hear You PM:
    “In particular, the Barbados Labour Party is calling on the Prime Minister and Minister of Finance, who has overall responsibility for the regulation of insurance companies, to state specifically whether or not Clico’s Statutory Fund is in deficit, and if so, to what extent.”
  • Barbados Nation Newspaper, 2/13/09:
    WHAT MATTERS MOST: Neo-CLICO!
    by CLYDE MASCOLL former DLP Party Leader and BLP Minister of State in the Ministry of Finance!  “Apart from having an investment portfolio that is capable of meeting its obligations without undue costs, the company must meet its regulatory capital requirements.”
  • BFP, Jan 24, 2009 - Barbados Environment Minister Denis Lowe, DLP Government - Plan To Build On Graeme Hall Wetlands
  • To look up CLICO Trinidad on A.M. Best’s Rating Center, you must use the full name, Colonial Life Ins Co (Trinidad) Ltd.  CLICO (Bahamas) Limited is also rated there. I could not find a rating for Clico Holdings (Barbados) Limited.