Safeguards put in place, Finance Minister says
Steps have been taken to ensure that a situation like that of the collapsed CLICO International Life Insurance Limited does not occur in this country again.
So says Minister of Finance and Economic Affairs, Christopher Sinckler. His comments came yesterday morning following a tour of Resolution Life Assurance Company Limited (ResLife), the successor of the now defunct CLICO International Life Insurance Limited.
Sinckler told the media that Government has made changes to the regulation of insurance companies with the passage of the Financial Services Commission Act, and the subsequent establishment of the regulatory body which the Act provides for. He also noted that the office of the Supervisor of Insurance is now managed by the Financial Services Commission (FSC). Now past its fifth year of operations, he noted that while the FSC still has some way to go, it is “coming along very nicely”.
“With good regulation, with companies that are operating appropriately and with good vigilance of the public – because the public still has a responsibility to exercise vigilance outside of the regulatory authority on companies that operate in Barbados and the Caribbean – I believe that a situation similar to what would have occurred with CLICO ought not to be repeated in Barbados going forward,” he said.
Minister Sinckler noted that “the elements” are in place and his ministry and the Government feel “reasonably confident” that there is an appropriate platform on which to build the level of supervision and regulation that would be required.
“We’ve done this already in the financial sector with the banking sector through the Central Bank’s very extensive and well accomplished regulatory and supervision of the banking sector. So there is a culture that we have that we can borrow on and build on and that is important going forward, because it builds the confidence of the average citizen that yes, we can take a risk in society with our hard earned resources and not have to face the type of calamitous situation that occurred not just in Barbados, but across the world,” he said.
His comments came as he indicated that while Barbados has reached a resolution in respect of CLICO, that is but part of the entire restructuring process of that company.
“We decided to go with the Barbados first option, not the Barbados only option, because the judicial management exercise by way of the restructuring proposal was for the entire Colonial Life portfolio to be dealt with. We still have some issues to work out with our partners in the OECS, we have not forgotten them. This is from the Government of Barbados’ side, we have not forgotten them, but we believe that when they see what is happening here and how this is unfolding, the fact that policyholders are beginning to see the benefit of that restructuring exercise, we hope and encourage them to get on board, so we can get that second phase of the restructuring completed,” he said.
That, Sinckler stated, would ensure that those in the Eastern Caribbean states who would have invested in CLICO can also have a successful resolution. He said discussions will have to be had with all of the parties involved to determine if the plan Barbados has put on the table and which was developed by judicial manager and approved by the court, is one that the other countries also want to follow.
“It is a matter of whether they want that in its pristine form, in a changed adumbrated version, or something entirely different. But that is a decision the OECS would have to make, nobody can force them into that,” he stated.