Were the CLICO pension funds segregated and managed separately as required in law?

Prior to being appointed to his regulatory position, (current Barbados Supervisor of Insurance) Carlos Belgrave was the General Manager of a local company that manufactures “flour, animal and poultry feeds” … from OffshoreAlert’s 2006 “Worst Regulator” Award

Barbados Thompson Government continues with the CLICO cover-up

“There are many persons in Barbados who owe, not so much the public, but more importantly the Policy-holders of CLICO, a complete candid set of answers, free of rhetoric and put in the simplest form.

It is being re-iterated that Mr. Leroy Parris is still Chairman so he owes the first set of explanations. It is his responsibility even if he chooses to delegate it. If you are in charge, you have to face the music at crunch time. The Board of Directors must also show that they are not asleep at the wheel. The Board should have a full investigation and someone has to be held responsible. If no-one is responsible, the members of the Board will have to answer other questions.

Mr. Thornhill and the other members of CLICO’s management team must be more candid and direct in their statements. They have to come out of their state of denial and accept responsibility for this state of events. They cannot hide behind CL Financial because managing the risk of a CL Financial failure must have been one of the contingencies they were planning against.

Mr. Parris most importantly has to speak out on the issue of Pensions. As I understand it these funds ought to be segregated and managed separately. I am yet to hear a definitive set of assurances that these various pension funds are fully intact. If they are not intact, CLICO also has to come under closer scrutiny with a view to whether or not there was any breaking of statutes on the part of the company.

The Government of Barbados also needs to provide the public a full explanation of what appears to be a systemic failing of institutions that were created to protect the public interest. Furthermore, the former Prime Minister ought for the record to explain what was happening under his watch or that of any other Minister who might have had responsibility for the Office of the Supervisor of insurance.”

… taken from an absolutely excellent article by The Devil’s Advocate over at Ian Bourne’s Bajan Reporter: CLICO Unplugged: An Insider’s Perspective

12 Comments

Filed under Barbados, Consumer Issues, Corruption, Crime & Law, Ethics, Freedom Of Information, Offshore Investments, Political Corruption, Politics, Politics & Corruption

12 responses to “Were the CLICO pension funds segregated and managed separately as required in law?

  1. Maguffy

    From the Nation online

    by WADE GIBBONS

    QUESTIONS HAVE BEEN RAISED about the involvement of two senior CLICO Holdings Barbados Limited officials in a private insurance enterprise offering services similar to those of their Whitepark Road, Bridgetown company.

    The WEEKEND NATION has learnt that both chairman Leroy Parris and president Terrence Thornhill are directors of the company, Professional Financial Services, which was incorporated in 1993 and offers similar business as their subsidiary CLICO General Insurance, including home insurance. CLICO General Insurance was recently sold.

    Attorney-at-law Leslie Haynes was listed as a director of the company, according to documents of incorporation. Former chief executive officer of Gems of Barbados, Rodney Wilkinson, was previously listed as a director also.

    Professional Financial Services Incorporated has been offering policy coverage for upscale homes and the WEEKEND NATION was able to obtain information from a copy of a 2007 policy for a Clermont Terrace, St Michael residence valued in excess of BD$$2.4 million.

    The matter was raised publicly last Sunday by Opposition Leader Mia Mottley during a meeting at Heroes Square, The City. She called for full disclosure as to Thornhill and Parris’ association with Professional Financial Services Incorporated, while still being the de facto bosses at CLICO.

    At that meeting Mottley also sought clarity on who were the individuals benefiting from Professional Financial Services Inc. and whether its control and finances were tied to CLICO, or solely to Thornhill, Parris and other unnamed shareholders.

    CLICO has been at the centre of a financial firestorm over the past 15 months, with Thornhill recently calling on policyholders for patience as the company tried to sort out its financial difficulties.

    The local company has been facing financial problems following the near collapse of its parent company in Trinidad and Tobago, CL Financial.

    CLICO, believed to have over $1 billion in assets, has already paid out over $118 million to anxious policyholders.

    Yesterday, repeated efforts to get comment from both Thornhill and Parris proved futile.

  2. Nostradamus

    Was / is The Executive Premium Flexible Annuity (EPFSA) a Ponzi / pyramid scheme?

  3. Pingback: » CLICO’s Leroy Parris in the News Again Keltruth Corp.: News Blog of Keltruth Corp. - Miami, Florida, USA.

  4. Loss of $75 billion in one year?

    A clever stock broker with a copy of the audited statements and proper back-up could tell you right away if this was a Ponzi scheme which would make the destruction of this company and write off of over $75 billion in assets in one year very close to the size of the Bernie Madoff rip off.

    Bernie is in jail where he belongs with more to follow but why is Parris still on the Board and where are the auditors?

  5. Bad Man Saying Nuttin

    Which pension funds? Which law? do you even have a clue about what you are talking about?

  6. reality check

    Bad Man Saying Nuttin

    How about being a Good Man saying something relevant?

    Enlighten us, and the truth will set you free.

  7. Laughing

    The EPFSA was not a PONZI scheme but it depended on the investment capability of CL Financial Trinidad to keep the funds flowing. Think about it! Where in Barbados do you invest $300 million to earn the kind of returns these guys were projecting? The Central Bank of Barbados would not have let CLICO Barbados via any of its companies invest more than US$1million per year outside of the country (or region for that matter) But CL Financial Trinidad a related company could receive the funds via related party transactions and do the investing via the Trinidadian environment with its way more relaxed exchange controls. CLICO Barbados therefore depended on the Trinidadian entity to make the projected gains and channel them back through to Barbados. When he house imploded last year we should not have fully signed away our connection to Trinidad, but we should have had a clause in the agreement that allowed us to recover any gains that CL Financial Trinidad makes, since they would have been funded to some extent by the money of Barbadians. Remember, when this was happening no one figured that the economic issues globally would have lasted so long. In better economic conditions and a different environemnt a cash rich investor could have bought CLICO disposed of the non-producing assets (well for an insurance company at least) and used the cash from the sale(s) to invest and recover more than the $300million (with Central Bank approval of course) in more liquid international markets.
    But sadly for these guys, they misread the situation.
    Funny though, how can you have a run on an insurance company? That says a lot for our insurance regulations and their application! Insurance companies are supposed to protect banks from bank runs! Go figure!

  8. reality check

    “Where in Barbados do you invest $300 million to earn the kind of returns these guys were projecting? ”

    You can’t and you don’t especially if the Central Bank has inflexible restrictions. The projected returns were never sustainable. Everyone was mesmerized by the bling and the BS not to mention the free jet rides. Free has become a very expensive ride.

    Insurance Companies should never have investments in non income producing assets over a very small percentage.

    Time and time again these Banks and Insurance companies all over the world controlled by speculators and get rich quick dreamers take small peoples money and piss it down the drain with reckless behaviour.

    No one pays the price in Barbados for negligence breach of trust and outright theft.

  9. Laughing

    I have to disagree with you there for a little bit. If CLICO had done its homework better, and sold those flexible annuity plans for say 5yr maximums beginning at the start of an international economic boom, the CLICO principals would have made more than enough money for everyone. But I think sadly they pitched the plans at the top of the curve when the boom was levelling out based on the wrong historical data. People like Maddoff in the US played the boom and bust cycles successfully, even with Ponzi schemes. But I will agree with you that greed is the downfall here, as it is in each and every one of the cases we have heard of during this economic crisis.
    The CLICO plans at the pitched returns were sustainable, but the annuity period, the investment strategy and more importantly the portfolio size and demographics (amount held by single individuals or institutional investors) would have had to be tweaked so as to allow for different maturity periods and not at the level of $300 million in one year. Remember Maddoff ran his Ponzi scheme through at least 4 or 5 boom and bust cycles for 40 years. Maddoff knew when to ‘hold them and when to fold them’ because he had basically created or assisted with the creation of some of the systems on which the US capital markets were based. Maddoff’s downfall was because of the penetration of the crisis. It was impossible for him to fold in one US sector and shift to another, and worse, he couldnt go overseas because those markets were messed up too. So he couldnt make enough money to line his own pockets while meeting his preset payment schedule this time. But he had done it for 40 yrs before!
    CLICO did not know when to fold…the money was too sweet!

  10. reality check

    Congressman

    Oh My God! Its obviously not a requirement to pass grade 6 to be a Congressman.

    Unfortuneately these types are already running our government except they know how to extract a few dollars for themselves going through the system, even maybe enough to tip over our island or at least have it declared bankrupt?

  11. Donald Duck, Esq

    Can anyone tell us what has happened to the legislation that dealt with pensions and which was debated in the house of assembly since 2003 and has never been proclaimed?