Today a Winding-up Order was granted by the Supreme Court appointing Mr. Craig Gomez of Baker Tilley Gomez as liquidator for CLICO Bahamas Limited (CLICO). The Order was issued on the application of the Minister of Finance pursuant to his authority under the Insurance Act. This action was taken by the Minister in order to protect the interest of the policyholders of CLICO.
This position was taken only after very careful consideration of the interest of the policyholders, staff and creditors of the company in the Bahamas and in the region and only after discussions with the principals of the company over many months urging and directing them to inject additional capital and liquidity into the company but to no avail.
This action was precipitated at this time because of the continuing decline in the market value of the real estate investment in the United States via CLICO Bahamas Limited subsidiaries, CLICO Enterprises Limited and Wellington Preserve Limited, the uncertain financial position of its ultimate parent C L Financial Limited of Trinidad and Tobago, the inability of the company to pay claims/surrenders of policies in one of the jurisdictions where it operates and the lack of a credible plan by the company to address the shortfall in capital and liquidity in a reasonable time. It was felt that to delay taking action would only further erode the assets of the company to the detriment of policyholders.
CLICO Bahamas Limited (formerly British Fidelity Assurance Limited), a subsidiary of CLICO (Holdings) Barbados Limited and a subsidiary of the C L Financial group, operated in the Bahamas as a part of the C L Financial group since 1992. However, the company operated for many years prior to 1992 as British Fidelity Assurance Limited under different owners. The company has active operations in the Bahamas, Belize and the Turks & Caicos Islands.
In addition to these locations, the company has run-off business in the US Virgin Islands, Cayman and Barbados. The company has just over 29,000 policyholders, over 170 staff and over 100 million dollars in policy liabilities. The majority of the policyholders, policy liabilities and staff are in the Bahamas. The company’s advances to its real estate subsidiary CLICO Enterprises Limited, based on unaudited accounts, expanded from 57 million dollars at the end of 2007 to 72 million dollars at the end of 2008.
We would like to assure the Bahamian public that the financial difficulties of CLICO Bahamas are in no way a reflection of the entire dynamic and robust local Bahamian insurance industry.
The domestic insurance industry, at the end of 2007, had 52 local companies and branches of foreign companies, over $1.2 billion in assets and total gross premiums of $701 million. CLICO Bahamas represented less than 1% of the total assets and less than 1% of the total gross premiums. The financial difficulties of CLICO Bahamas are a direct result of the company’s business model and investment policies.
We would like to encourage the liquidators to move with all speed in communicating practical guidance to policyholders and other creditors who have claims against the company so as to minimize any uncertainty. Policyholders should consult with their financial advisors on the actions they should now take.
Persons having any questions or queries may contact the Registrar of Insurance Companies at 3rd Floor, Charlotte House, West Bay Street.