As the CLICO debacle continues to unravel, policyholders and investors in Barbados and the Eastern Caribbean can take little comfort, if any, in the latest revelations that have come out of Trinidad and Tobago.
Nearly three years after news of the crisis first broke, the most mind-boggling of the findings detailed in a recent SUNDAY EXPRESS report has been the fact that state and government officials knew that Trinidad and Tobago’s number one insurer was not only routinely breaking the rules, but was operating well outside the law and yet they did absolutely nothing about it.
This is not to say that the directors and officers who were entrusted to manage the affairs of CLICO and its parent company, CL Financial, are without fault; neither are the company’s external auditors PriceWaterhouseCoopers (PwC), which signed off on the annual financial accounts.
Indeed, one of the most surprising findings to spring forth from a recent analysis of the operations of CLICO Investment Bank (CIB) is that it was given a clean 2007 audit by PwC, even though it did not pay corporate taxes between 2007 and 2009 and had been faced with serious liquidity challenges.
In fact, in keeping with the CL Financial tradition of tardy filings, the 2007 accounts were signed off late, in November 2008 to be exact.
This raises the question: to what extent, if any, were there similar breaches in Barbados, given the corporate culture of the Trinidad parent company?
While it is noteworthy that the judicial manager Deloitte Consulting has sought to petition the court to authorize a forensic audit, we question the real value of this move to the policyholders of CLICO. Having, for example, discovered that some of the assets may be traced to the territories of the Eastern Caribbean or elsewhere, how are these assets going to be recovered? Indeed, are such assets still either recognizable or realizable?
And why is it that the judicial manager has not sought leave of the court to bring a class action suit against the Supervisor of Insurance, joining the directors and management of the CLICO Group, as well as the auditors in the matter?
 There appears to be a prima facie case of negligence in the exercise of their duty while the victims – numbering in the thousands – have been left with nothing else to hold on to but the reassuring words of politicians in the absence of a sound and practical settlement to their plight.
This situation is nothing short of a national disgrace!
