The private sector cannot reject Government involvement in their affairs but when their businesses are on the verge of collapse, demand that the state steps in to save them.
That was the argument of St Michael South Central Member of Parliament Richard Sealy as he contributed to debate on the CLICO International Life Insurance Company Resolution which was passed last night in the House of Assembly.
He said Governments are constantly told to stay out of the private sector and let the market prevail, however, when crises arise, the private sector then wants Government to intervene.
Sealy, who is also Minister of Tourism, pointed to the collapse of Trade Confirmers, which he described as “eerily similar” to CLICO and was also a Trinidad-headquartered company.
In that instance, he said several Barbadians lost their life savings. He also pointed to the 2007/2008 mortgage crisis in the United States which was the precursor to the global financial crisis.
According to Sealy if companies are “too big to fail” then they must subject themselves to state regulation and examination.
He acknowledged that CLICO’s high-yielding Executive Flexible Premium Annuities (EFPAs) were risky instruments, however, Government was seeking to protect investors and secure at least the principal invested.
He noted that while policy holders were expected to receive their traditional coverage, EFPA investors would get their principal over a ten-year period with “blended payments”.
Praising the Minister of Finance Chris Sinckler and his team in the Ministry for bringing resolution to the near 10-year debacle, he described the parliamentary measure as a “happy day” for CLICO investors and policyholders.
“There is a limit to what the state can do and the only way to prevent this from recurring is to have stringent vigilance,” Sealy said.
He said it was hoped that those who were “burnt” by the CLICO affair would appreciate the efforts of Government to bring a resolution to the issue. (IMC)