The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading clergyman yesterday urged the Government to move “hastily” on providing the long-awaited $30 million CLICO (Bahamas) guarantee, adding that it was hard to avoid the contrast with the Bank of the Bahamas ‘rescue’.

Bishop Simeon Hall, himself a long-suffering CLICO (Bahamas) policyholder, told Tribune Business that the Government needed use the same formula and “find the resources to rescue” the insolvent insurer’s Bahamian victims.

While backing the Christie administration for ‘bailing out’ Bank of the Bahamas, Bishop Hall said successive governments were “complicit” in CLICO (Bahamas) collapse because they failed to prevent its assets/funds leaving the country without the proper exchange control approvals.

Tribune Business revealed yesterday how CLICO (Bahamas) liquidator, Craig A. ‘Tony’ Gomez, had warned that the transfer of the insurer’s remaining ‘in force’ policies to a new underwriter was “in abeyance” until the Government delivered on its long-promised $30 million guarantee.

That is vital to underwrite the acquisition of CLICO (Bahamas) policy portfolio by a new carrier, as all potential buyers have said they will not conclude a deal in the absence of a guarantee.

This is because of the “shortfall” on CLICO (Bahamas) balance sheet. Mr Gomez’s latest report to the Supreme Court shows the insurer is insolvent to the tune of $34.146 million, with $41.546 million in assets dwarfed by $75.693 million in liabilities.

Without that $30 million ‘guarantee’, the risk to acquiring insurers is just too great, and CLICO (Bahamas) 13,000-plus policyholders remain stuck in limbo, unable to recover their investments and move on with their lives.

Yet, while the Government galloped in to ‘rescue’ Bank of the Bahamas, putting the $100 million ‘bad loans for bonds’ swap in place in months, CLICO (Bahamas) has been insolvent for over five-and-a-half years. And the guarantee was promised by the former Ingraham administration, around four years ago.

“I think I would put it like this,” Bishop Hall told Tribune Business, when asked about the comparisons and contrasts between the Government’s speed of action on Bank of the Bahamas and CLICO (Bahamas).

“I want to commend the Government for helping the local bank, Bank of the Bahamas, as I think it should,” he added. “Why the bank got like that is not in my purview; banks generally make money.

“But, while I commend them, I would also encourage them, and ask the Government, to look hastily at the CLICO matter. Some 35,000 persons have in some ways been distressed or disrupted by the episode.”

Bishop Hall said both he and his church had been negatively impacted by the CLICO (Bahamas) collapse, as both of them had policies and monies invested with the insurer.

He told Tribune Business that the ripple effects of its insolvency had been felt throughout Bahamian society, with this brought home to him when he sat on the CLICO (Bahamas) creditors committee and fielded calls from “hundreds” of policyholders.

“I got even more disturbed when I got on the inside than before I was there,” Bishop Hall said. “Government should do something similar [to Bank of the Bahamas] to find the resources to come to the rescue of Bahamians who had invested their money in CLICO.

“The Government should give oversight to the investments of Bahamians, and should have the last say in whether a company goes belly up.”

Mr Gomez, as liquidator, was working on a similar structure to that used to rescue Bank of the Bahamas, involving the creation of a special purpose vehicle (SPV) into which CLICO (Bahamas) remaining policies would be transferred.

They would then by administered by a private sector manager, different from the liquidator, with the structure financially underwritten by due premium payments on the policies. This structure would endure until the Government guarantee came through, and the policy portfolio sold.

Bishop Hall yesterday said the Government carried great responsibility to bring CLICO (Bahamas) liquidation to a positive resolution.

“These people were left out in the cold,” he added. “Wherever people’s monies, their life savings, is concerned, government should give the fullest protection.

“We should remember that millions of dollars left the country unbeknownst to successive governments, so they became complicit in the whole exercise.”

Mr Gomez has confirmed in his Supreme Court reports that CLICO (Bahamas) circumvented this nation’s exchange control regulations, taking money out of this nation without Central Bank approval to buy and invest in south Florida real estate.

Bishop Hall, recounting how one CLICO (Bahamas) policyholder had told him she could not die until the matter was resolved, noted how other Caribbean nations had stepped in to aid their citizens.

Suggesting that CLICO (Bahamas) “in some ways” was more important than Bank of the Bahamas, and said: “It’s difficult not to call on the Government to do the same thing for CLICO when you understand what they have done for Bank of the Bahamas.”