Officials representing thousands of policyholders and investors owed millions of dollars by CLICO and British American Insurance has welcomed the Financial Services Commission proposed increased surveillance of insurance companies.
The Barbados Investors and Policyholders’ Alliance has a message for the FSC, however: enforce it or forget it. That was BIPA’s reaction to a Barbados TODAY article, which detailed a series of legislative changes and new guidelines as part of the FSC’s increased regulation of life and general insurance companies.
In a consultation paper on the matter, the regulator’s Director of Insurance and Pensions, Randy Graham, said the proposals were intended to “improve the prudential regulation of the insurance industry in Barbados”, a statement BIPA was happy to hear.
But the organisation cautioned that without the adequate supervision and enforcement of regulations and legislation, such measures would be “pointless”.
“There are already substantial provisions within the Companies Act and the Insurance Act which, had they been enforced in a timely manner by the regulatory bodies and others in office, would have minimised, if not completely prevented the CLICO and BAICO debacle,” BIPA Chairperson, June Fowler said.
She said the result was that 35,000 policyholders now “find themselves abandoned by a system that has completely failed them”.
Fowler also expected additional breaches of existing legislation and regulations to “come to light as a result of the legal proceedings currently being initiated by BIPA”.
“You can issue guidelines and regulate and legislate until the end of time, but unless the authorities commit to strict supervision and enforcement without favour, tightening the supervisory framework just won’t make any difference,” she said.
BIPA officials think the new FSC proposals “arise out of a complete lack of confidence in the insurance sector as a direct result of the failure of the CLICO Judicial Manager to come up with a timely and satisfactory solution to the fiasco, and the continuing empty reassurances and vague promises made by the current government”.
Today, the organisation also commended the Trinidad and Tobago Central Bank “for recognising the likely criminality involved in the operations and subsequent collapse of the CL Financial Ltd group of companies and seeing fit to substantiate its suspicions by mobilising an international team of forensic experts and producing a ‘voluminous’ report”.
“BIPA finds itself wondering why similar action has never been taken here in Barbados by our own Central Bank, whether independently, or as a result of the recommendation of the Financial Services Commission, the Government entity responsible for oversight of the Insurance industry as well as of Deloitte, the Judicial Manager of CLICO,” BIPA said in statement on the matter.
“The alliance would further be interested to know the extent of cooperation afforded by Barbados to the international team of forensic experts appointed in Trinidad in their efforts to track multi-million dollar transactions ‘in several jurisdictions’.
BIPA finds it inexplicable that the alliance itself, which is merely an advocate for the 35,000 policyholders in Barbados devastated by this debacle, seems to be the only body in Barbados pursuing such criminal proceedings,” it added. (SC)