It is unfortunate that Prime Minister Freundel Stuart has attracted the ire of CLICO policyholders who, at this time, are more deserving of compassion than criticism, given the tremendous stress they are under because of the uncertainty surrounding CLICO’s future and the recovery of their investments.
Contributing to the Estimates Debate in the House of Assembly earlier this week, Mr Stuart singled out investors in CLICO’s high-interest-yielding Executive Flexible Premium Annuity (EFPA) and came across as somewhat insensitive to their plight. He said he had a list of these investors, knew who they were, and would have “a lot” to say on the CLICO issue at a future date.
Responding to criticism of his silence on the CLICO issue from the Opposition benches, Mr Stuart conveyed the impression that EFPA investors were in their current predicament because of greed –– having been “entranced by the lure of attractive interest rates” to make “quick money”, as he put it –– despite the obviously higher than usual risk associated with the EFPA which, he pointed out, was “not a traditional insurance product according to legal advice”.
Understandably, CLICO policyholders are hopping mad. They see the Prime Minister’s comments as not only injudicious, but equally threatening. Perhaps, in their minds, the experience rekindled memories of a previous dispensation –– which Mr Stuart himself had railed against in the last general election campaign –– when the business of private citizens was occasionally laid bare on the floor of the House.
Regardless of how Mr Stuart may feel about the issue, greed is certainly not a “sin” in the context of a capitalist economy, which is basically what we have in Barbados. Indeed, capitalism may be said to be a celebration of greed. Because it rewards greed or self-interest, capitalism is seen around the world as the most efficient economic system, especially after the collapse of the alternative socialist model.
What is frowned upon, however, is when greed gets out of hand and causes major damage. When this occurs, it is usually a consequence of the failure of the regulatory function of the State. Capitalism subscribes to the notion that society as a whole benefits when persons are allowed to pursue their self-interest with the expectation of making a reasonable profit through involvement in business ventures.
In this regard, CLICO may be equally accused of greed, a point which was apparently overlooked by the Prime Minister in his comments. The collapsed insurance giant placed the EFPA on the market, not as an act of charity, but driven by the obvious expectation of making a profit, in pretty much the same way as people who bought the policy.
However, the fact that Mr Stuart mentioned that the EFPA was “not a traditional insurance product, according to legal advice”, raises some pertinent questions. Were the relevant authorities aware of this when the product was placed on the market? If they were, why did they allow CLICO to proceed? Were effective monitoring systems put in place to ensure that the interests of investors were safeguarded? What were they and how did they work?
If the authorities had questions about the product, but allowed it to go on the market before obtaining satisfactory answers, then what we have here is a failure of the regulatory function of the state, which should have been looking out for the interests of policyholders. So the state, quite rightfully, has some questions to answer.
Going forward, there is an obvious need for a strengthening of the regulatory system to give people making investments the assurance the state is looking out for their interests. Otherwise, Barbadians are more than likely to shy away from putting their hard-earned dollars into any future investments after the CLICO experience.
Many EFPA investors appear to be ordinary Barbadians who were simply trying to secure the future not only for themselves, but also their offspring. Seventy-nine-year-old Alec is one of them. He told Barbados TODAY this week: “. . . It appears to me that [the Prime Minister] is accusing or casting aspersions on the victims of CLICO’s infidelity . . . . That type of thing is really hurtful to me. That investment I made for myself, my children and grandchildren.”
It is not the first time the Prime Minister’s words have rubbed Barbadians the wrong way. Quite a number of people have accused him of a tendency to be insulting and condescending in the way he speaks sometimes. As the saying goes, it is not what is said, it is how it is said.
Mr Stuart may have a facility with language, but the complaints clearly suggest that he needs to exercise greater care in his choice of words. Failure to do so may see him alienating himself from Barbadians whose support and cooperation his Government needs.