CLICO International Life Barbados, which fell into difficulties, will be placed under judicial management in a move Government expects will stop pensioners and other investors from being badly hurt.
The government of Barbados applied on March 17, 2011, to the High Court in a bid to have CLICO International Life Insurance placed under judicial management. Solicitor General Jennifer Edwards, presented a petition for the appointment on behalf of Supervisor of Insurance Vernese Brathwaite.
This follows an announcement by Minister of Finance and Economic Affairs Chris Sinckler, that the special oversight committee, which was headed by Permanent Secretary in the Ministry of Finance, William Layne, had recommended the company be placed under judicial management in December, 2010.
With this new twist in the CLICO Barbados saga, the Barbados prime minister assured policyholders their principal investments in CLICO will be returned.
Reasons for the CLICO 2009 Liquidity Crisis
Reasons that led to a liquidity crunch were, firstly, plummeting methanol and ammonia prices on the world market and secondly, over-exposure to commercial real estate. CL Financial is asset-rich (around TT$100 billion) but cash poor with liquidity problems.
This scenario was further compounded to fear in the economy which led to an unusually high level of withdrawal requests which placed further strain on available liquid resources.