The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent CLICO (Bahamas) policyholder yesterday said the Government has a moral responsibility to compensate victims because of the regulatory failings that aided the insurer’s collapse.

Bishop Simeon Hall, while “commending” the Government’s confirmation that it will allocate a further $10m in the upcoming 2019-2020 Budget to policyholder payouts, told Tribune Business it had to accept “some culpability” for the company’s collapse into insolvency more than ten years ago.

“We commend the Government for keeping its promise in this area, and concomitant with those announcement it should come with ways it can protect unsuspecting Bahamians from falling into that trap again,” he said.

“It [the Government] must take some culpability in allowing it to happen in the first place..... On the one hand we want to commend the Government for putting out some money to remedy CLICO, but they must also make sure it does not happen again.

“It’s rather distressing that there are some persons that died without receiving their rights and what was due to them. It’s like dying in the wilderness without entering the promised land.”

Among the identified regulatory failings that contributed to the life and health insurer’s collapse was the ability of CLICO (Bahamas) to transfer some $73m in assets outside The Bahamas, without ever obtaining exchange control approval from the Central Bank, for investment in a failed, illiquid Florida real estate project.

Dr Rodger Brown, the then-registrar of insurance, told Tribune Business at the time that CLICO (Bahamas) also simply ignored his efforts to supervise and regulate it. Its February 2009 collapse into insolvency, and court-supervised liquidation, resulted in a major shake-up and overhaul of the Bahamian insurance regulatory regime.

Bishop Hall, meanwhile, said it had been extremely difficult for impacted CLICO (Bahamas) clients to obtain redress for their financial loss, contrasting the protections afforded by this country and its judicial system with those available in the US.

“How do you fight CLICO and people like that?” he asked. “You can’t. Not in The Bahamas. If we were in the US every CLICO policyholder would be protected. They have ways by which the smallest person can say they were marginalised, disenfranchised and want my rights. Here it’s so difficult to do that.

“I think the least the policyholders should expect is to get all our monies back as we invested it more than 10 years ago. We are moving towards first-world status and one of the ways we do that with a quantum leap is by protecting the ordinary citizen.”

Craig Tony Gomez, the Baker Tilly Gomez accountant and partner who serves as CLICO (Bahamas) liquidator, in his last report to the Supreme Court, said he was only able to recover $38 million - just over half of the $73m invested - in selling the Wellington Preserve development to a host of real estate buyers.

This resulted in a $35.8m loss to CLICO Enterprises, with its parent, CLICO (Bahamas), suffering a $55.817 million solvency deficiency at end-June 2017.