The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas must “better protect the small man” from unscrupulous companies, a prominent cleric urged yesterday, as CLICO victims receive the latest payouts on their surrendered or in-force life insurance policies.

Bishop Simeon Hall, who was himself a client when the insolvent insurer collapsed more than 15-and-a-half years ago, told Tribune Business the suffering inflicted upon thousands of Bahamians who suddenly lost access to their life savings, investments and retirement income exposed the lack of safeguards for “the most vulnerable” in society.

Asserting that he “really hopes” The Bahamas has learnt the necessary lessons from the CLICO (Bahamas) debacle, with multiple policyholders having died before being fully compensated and others yet to fully recover their assets, he confirmed that the insurer’s Supreme Court-appointed liquidator has made a further payout to victims following a near-20 month pause.

“I think they have made some payment. That’s what I understand,” Bishop Hall told this newspaper. “They haven’t given me much. Some payments have been made. Mr Gomez told me that. It looks like they’ve been spread out over some time. I pray it doesn’t take as long for people to get it as it was long in terms of the legal position reaching this conclusion. Thank God something has happened.”

Mr Gomez is Craig A. ‘Tony’ Gomez, the Baker Tilly Gomez accountant and managing partner, who has been acting as CLICO (Bahamas) liquidator since the insurer was placed under the Supreme Court supervision in February 2009. He is prevented by a gagging Order from speaking publicly about the case.

However, Tribune Business understands that the latest payments to victims have been taking place over the past two weeks with some 60 percent of those who surrendered their life insurance policies now fully compensated and paid out. The 40 percent of clients yet to be made whole are those whose policies have greater surrender values or are still in effect and being managed by BAF Financial.

“Payments have been going on over the past two weeks,” a well-placed source, speaking on condition of anonymity, confirmed. “They are trying to run a very controlled process and make the payments in a controlled way for the benefit of creditors.” They added that this round of compensation, the first for around 20 months since 2022, may be concluded “by next weekend”.

It is thought about $55m has been paid out to CLICO (Bahamas) victims across three different administrations, with the Government stepping in to finance the compensation in the insurer’s stead via the Bahamian taxpayer. The Government, and those policyholders yet to receive full compensation, must now wait on Trinidad to pay the agreed $110.827m settlement to CLICO (Bahamas) for their reimbursement.

That sum was offered by liquidators for the Bahamian insurer’s Trinidad-based parent, CL Financial, and Sir Ian Winder, the Supreme Court’s chief justice, last year gave Mr Gomez the go-ahead to accept it in his capacity as CLICO (Bahamas) liquidator.

The nine-figure sum represents a settlement of CLICO (Bahamas) claim against its Trinidadian parent. CL Financial had guaranteed $58m, or 79.5 percent, of the monies its Bahamian subsidiary had advanced to another group entity, CLICO Enterprises, which subsequently defaulted on the loan repayments. Mr Gomez thus argued that CLICO (Bahamas) was a secured creditor of CL Financial.

However, not a cent of the $110.827m has yet been received from Trinidad. The timing and amount of any payout depends on CL Financial’s liquidators, and the Trinidad courts, and neither Mr Gomez nor anyone in The Bahamas has control of this. As a result, it could be months and even some years yet before all or part of this money is paid out and received in The Bahamas.

CLICO (Bahamas) is far from being the only CL Financial creditor, and the latter’s Trinidadian liquidators must now work to secure and liquidate assets in that jurisdiction, converting them into cash and then obtaining approval from that nation’s courts before the monies can be transferred to Mr Gomez and the liquidation estate he oversees. All this will take time.

Prime Minister Philip Davis KC earlier this year said the Government planned to make no more payments to the CLICO (Bahamas) policyholders until the payments from Trinidad were received, even though the $110.827m is likely to paid in tranches over a period of time as opposed to a lump sum.

“The liquidators for CLICO have reached a settlement with the Government of Trinidad or the entity controlling CLICO’s assets in Trinidad. This settlement will benefit the funds here, ensuring we can discharge CLICO’s responsibilities to our customers. In fact, we might see how we can recoup some of the advances we made to assist those affected,” Mr Davis said then. 

“The Ministry of Finance and our technical team are meeting with the liquidator to resolve this and ensure the funds are secure. There’s no need for further allocation. It seems significant progress has been made in Trinidad to resolve all related issues, benefiting policyholders here in The Bahamas.

“We do not intend to trouble the policyholders; we want to make them whole. We stepped in to help, and that’s what we did. If we’re able to retrieve some of the taxpayer’s money, it would be a windfall for us.”

However, Bishop Hall told Tribune Business: “I understand the policymakers can be hopeful; optimistic and hopeful. I’m glad for some resolution to have been reached, and I just pray it never happens again. A little something is better than nothing at all. Christmas is coming.

“I think the Government should protect policyholders more than they did with CLICO. I think they should have been more precise, more particular, more judicious with these foreign companies. There’s nothing there for persons to hold on to than make noise and agitate. What about those who have died? I understand some policyholders’ children are now facing an uphill battle” to claim what is due to their parents’ estate.

“We have to protect the small man. We have to protect those persons who are most vulnerable. Any area of our society where people are vulnerable, I think we should protect them better.” Asked whether The Bahamas has learned the right lessons from CLICO’s failure, Bishop Hall replied: “I hope we have; I really hope we have.

“We have to be more specific and more protecting than we were back then. People are now willing to look a little further and a little deeper than before. Personally, I’ve learned quite a bit from this. We have to cover ourselves when we look at these things and have to be more particular. If a business gets a licence from the Government, the Government has the task of protecting local consumers.”