Blame the demise of CLICO International Life Insurance Company on the leaders of the failed company and not local regulators.
That was the position of former Prime Minister Owen Arthur as the House of Assembly last night debated and passed the CLICO International Life Insurance Company Resolution.
Government is seeking to establish replacement companies for CLICO and bring closure for hundreds of policyholders and investors whose savings were at risk.
“There are other countries where people learn from their errors. CLICO was not an error of supervision. The supervisor and regulator, properly so, brought to CLICO’s attention and gave it a directive to stop writing a particular policy that it was not authorized to do.
“He sought to protect the public’s interest. He was not allowed to protect the public interest by having CLICO stop writing those instruments,” Arthur contended.
The former Minister of Finance said the assets of the old CLICO “would have been sufficient to cover life insurance policies”.
However, he argued the insurance company’s troubles revolved around the controversial Executive Flexible Premium Annuities (EFPAs).
According to the Independent Member of Parliament for St Peter: “Were it not for [the EFPAs] we would not be here today. If we had only to match the liabilities of CLICO in respect of insurance policies with the assets of CLICO, CLICO would be in surplus.
“The problem with CLICO is that the assets of CLICO would not cover simultaneously the life insurance policies as well as the [EFPAs].
“The point is the company was given a directive to stop writing the annuities that have now turned out to have caused the problem that puts this House in a position where we now have to guarantee hundreds of millions of dollars for a Government that is already too heavily in debt.
“The question is what remedies should now be put into the law where a directive is given to an insurance company by a regulator to stop doing something that can be invidious to the interest of the public and the interest of policyholders and shareholders,” he pointed out. (IMC)