Barbados Investors and Policyholders Alliance Inc commends the recent reported sourcing of US$100 million by Eastern Caribbean Currency Union governments from Trinidad and Tobago to cushion the devastating loss which would otherwise have been borne by BAICO and CLICO policyholders who trusted their governments to regulate the insurance industry and enforce the appropriate laws.
The EC governments have demonstrated responsibility, leadership and empathy for those who elected them, qualities sadly lacking in many government officials. Their actions acknowledge that tens of thousands of people are victims of greed, recklessness and irresponsibility of businessmen and their board members, and negligence of key government officials.
Presumably the EC governments, committed to properly representing their constituents, convinced the government of Trinidad of the domino effect of their failure to properly regulate CL Financial Ltd., the ultimate parent company of BAICO and CLICO businesses throughout the region.
Given the size of CL Financial Ltd. and the resources available to it, confidence would have been placed in its ability to support and meet all financial commitments to its various subsidiaries. It could have been argued that failure to properly regulate C L Financial would contribute to the collapse of the company and its subsidiaries which, no longer able to allay concerns about their balance sheets and statutory funds, would inevitably meet the same fate.
BIPA notes that the Trinidad government has consequently allocated a large sum to compensate policyholders, and cooperated with a number of EC governments, clearly showing its recognition of the failure of its regulatory authorities to act effectively, despite being aware for some time of the company’s risky financial practices.
The Government of Barbados has already acknowledged its own failures in this regard and must act, as have Trinidad and the EC governments, to fully compensate the victims of such failures.
If, after four years of procrastination, the Government of Barbados does not act without further delay, the financial industry in Barbados will suffer a major crisis of investor confidence, bringing it to its knees. BIPA expects the key figures in the Government of Barbados to understand the weightiness of their responsibilities in this fiasco, and act now. If they lack the necessary skill and expertise, they might consider consulting the EC governments on how to achieve success in this matter.
— June Fowler,