Saturday, April 20, 2024

EDITORIAL: CLICO issue needs clarity


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PRIME MINISTER Freundel Stuart’s declaration that Government is committed to ensuring “that people get their principal investments in CLICO” must have been welcome news for the thousands of concerned policyholders who invested millions in that insurance company.
But if policyholders don’t seem too ecstatic about the announcement, don’t blame them. The devil is always in the details. Stuart needs to reveal more if he hopes to generate confidence among policyholders in particular, and the public in general.
Stuart sent the clearest message to date on his administration’s intentions to deal with this thorny CLICO issue when, speaking in the House of Assembly on Wednesday during debate on the 2011-2012 Estimates, he said: “The commitment of the Government is to ensure that people get their principal investments in CLICO.”
He said when he acted as Minister of Finance he saw the report of the Oversight Committee, and had satisfied himself after speaking to the committee’s chairman that that was a claim he could credibly make, “and I stand by it”.
For the sake of clarity the Prime Minister should tell the public if Government’s commitment to investors’ recovering their principal is just for individuals or if it includes those institutions like the Barbados Association of Retired Persons and professionals like himself, who invested in a flexible premium annuity with the company.
This is important because, if reports are accurate, it could mean the difference between an estimated $300 million for just individuals and about $500 million for all the investors. And remember, most of those annuities mature in 2012.
Then there is the question of where the money will come from to pay investors. Given that many of CLICO’s assets are property, and right now that market is stagnant, will Government use them as collateral to float a bond issue and take the sums generated to pay investors their principal?
Or will they finance the repayment by using taxpayers’ money from the Consolidated Fund? And if they took this route, would they pay a percentage of the investment principal and the rest over a number of years?
These are significant areas that Stuart needs to clarify for the public. With Government already running a half-billion dollar fiscal deficit, and oil and food prices continuing to escalate on the international market, the administration cannot realistically afford to foot the CLICO bill from its finances.
So before policyholders can cheer there must be a clear statement of how this commitment will be honoured despite the other pressing economic challenges.
We feel, too, that in the public interest Stuart should make the Oversight Committee’s report public. This would also go a long way in helping to build public confidence in Government’s handling of this matter.
Stuart’s position differs from the pronouncements made by Minister in the Office of the Prime Minister Senator Darcy Boyce during a 61-minute national Press conference last July 29 in which he hinted that some investors might not receive compensation.
We wonder what has changed to make the Prime Minister come out in such an emphatic fashion to assure the investors that they will get their principal back.
Be that as it may, we see this clear, unequivocal position by the Government as a step towards a solution for this messy CLICO affair.


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