Prime Minister Communication on ClICO's Liquidation



<<< Prime Minister Hubert Ingraham.

Nassau, The Bahamas: Presented is a statement to Parliament on CLICO Bahamas Ltd. by Prime Minister and Minister of Finance the Rt. Hon. Hubert Ingraham presented Monday, March 2nd.

LISTEN NOW – Prime Minister Ingraham – Statement on CLICO Bahamas Ltd




Mr. Speaker,

I wish to make a statement to Parliament regarding the facts and circumstances surrounding the present state of CLICO (Bahamas) Limited (CLICO).

As you would be aware, on February 24, 2009, a winding-up Order was granted by the Supreme Court appointing Mr. Craig Gomez of Baker Tilley Gomez as Provisional Liquidator for CLICO (Bahamas) Limited (CLICO). The Order was made following a petition by the Registrar of Insurance Companies (ORIC) in accordance with authority granted under Section 41 of the Insurance Act. This action was taken in order to protect the interest of the policyholders of CLICO. A hearing of the application for liquidation is scheduled to be heard on March 17, 2009.

CLICO was petitioned into liquidation due to its insolvency on two counts: (i) it was unable to pay claims of US$2.6 million in the Turks & Caicos Islands, and (ii) its liabilities were estimated to exceed its assets by at least $9 million. As a consequence CLICO was deemed insolvent.

Mr. Speaker,

CLICO was incorporated under the laws of the Commonwealth of The Bahamas on May 10, 1960, as British Fidelity Assurance Company Limited (BACO), a life insurance company, licensed to sell individual and group life, and health and annuity products. All outstanding stock was purchased by Sammons Enterprises Incorporated in mid-1968.

In 1992 CL Financial Limited of Trinidad and Tobago purchased British Fidelity Assurance Company Limited from Sammons Enterprises Incorporated and on April 7, 2005, the Company’s name was changed from British Fidelity Assurance Company Limited to CLICO (Bahamas) Limited.

In addition to its operations in The Bahamas CLICO has branch operations in the Turks and Caicos Islands and in Belize.

In 2008 The Bahamas accounted for some 68% of CLICO’s total premiums; Turks & Caicos Islands 27%; and Belize5% of total premiums.

The staff complement of CLICO Bahamas, Turks and Caicos and Belize is about 170. In The Bahamas, staff totals about 141, some 90 sales agents and 51 administrative staff. Belize has 31 persons employed. A detailed breakdown of CLICO’s operations is as follow:


# Policies

Policy Liabilities (B$ equivalent)

# Agents

# Admin Staff








Left from closed operations










Left from closed operations.



Turks & Caicos










The Bahamas serves as the parent jurisdiction for the Turks and Caicos Islands and Belize and regulator of CLICO. This, however, is not to be confused with the operations in Trinidad and Tobago or elsewhere, which are separate entities from The Bahamas operations, as will become clearer in this Communication.


Mr. Speaker,

The parent company of CLICO is CLICO Holdings (Barbados) Limited, a company incorporated in Barbados. CLICO Holdings (Barbados) Limited is itself owned by CL Financial Limited, the ultimate parent company of CLICO. CL Financial Limited is headquartered in the Republic of Trinidad & Tobago with an audited asset base in excess of US$11 billion as at December 31, 2007.

CL Financial Limited is a global conglomerate with diverse investments in the manufacturing sector and is world renowned for its methanol, spirits, energy and financial services businesses in the Caribbean, including banking and insurance, most notably: the Republic Bank, British American Insurance Company (BAICO) and vast real estate holdings worldwide.

· Wellington Preserve Corporation of Florida, a company whose primary business is property development, the sale of lots and an equestrian project, is a subsidiary of CLICO Enterprises Limited a CLICO owned Company. Other real estate investments of CL Financial include the “W” Fort Lauderdale Hotel and Residences, Europa, Infinity 1 and 11 and Shabisco (a bakery incorporated in Haiti).

Mr. Speaker,

CLICO owns, through its Bahamian subsidiary, CLICO Enterprises Limited, a number of assets in The Bahamas, namely:


Reputed Value


12.5 acres Westridge, Nassau



Townhouses in Freeport



Lands & buildings(used for operations & GB millworks)



Cash/ Bonds/Fixed deposits




Mr. Speaker,

Since 2004 CLICO began making excessive cash advances called “loans to subsidiary” to CLICO Enterprises Limited. For example, in 2003 there was zero “loan to subsidiary”. However loans to the subsidiary increased as follow:

2007         2006                 2005                        2004_____

Loan to subsidiary 57,010,       248 68,            301,770             53,760,786 37, 092,149

Interest earned 9,507,569 8,363,556 4,292,670 1,705,884

Loans were granted at a rate of interest of 12% per annum with no fixed maturity date.

In 2007, loans to subsidiary represented 58.56% of total assets and 68% of invested assets. These advances to CLICO Enterprises Limited were made to Wellington Preserve Corporation’s, Florida project. This US real estate investment was financed mainly from US dollar annuities placed in the Turks & Caicos Islands subsidiary, advances from CL Financial Limited and a US mortgage on the property where both Wellington Preserve Corporation and CLICO are mortgagors.

This US investment is in respect of a 600-acre real estate development with a reputed value of $80 million. A write-down of $25 million occurred in 2007, mainly as a result of the decline of sales in the Florida real estate market and the non-completion of the project. As at December 31, 2008, loans to subsidiaries of CLICO were $73.6 million.

It was these advances totalling $73.6 million by CLICO that compromised its financial integrity, as neither Wellington Preserve Corporation nor CLICO Enterprises Limited are in a position to repay the loans from the company. Additionally, with the significant decline in the Florida real estate market and the $65 million needed to complete the Wellington Preserve Project, the market value of the property is now substantially less than its initial book value, further deteriorating the financial situation.

Mr. Speaker,

It appears that CLICO never sought the required “no objection” from The Bahamas Registrar of Insurance Companies in connection with the Company’s investments, loans to subsidiaries or related party transactions.

Indeed, in several prudential meetings from as early as 2004, 2006 and 2007, I am advised, concern was expressed about this matter and a request was made for information regarding all investments undertaken by the Company within and outside The Bahamas. In fact, at one of the 2007 prudential meetings, the Registrar of Insurance Companies demanded that the Company return the then $53 million invested in order to reduce the inter-company loan balances. The Company gave assurances that it would, I am advised, but failed to do so.

Mr. Speaker,

It was after the receipt of the 2007 audited financial statements in July 2008 that the extent of the real estate investments was again highlighted. On December 22, 2008, a letter was sent to CLICO placing the following requirements and restrictions on its operations:

· That it realize repayment of all inter-company balances not later than Friday, January 9, 2009, and, that

I. Any investments/advances of any nature to related parties and or subsidiaries; or

II. Any advances/ loans of any nature to non-related parties other than policy loans in the normal course of business; or

III. Any borrowings or mortgages; or

IV. Any investments in real estate; or

V. Any advances to directors or senior management; or

VI. Any dividend payments to shareholders; or

VII. Any guarantees to any entity; or

VIII. Any new or changes to the Company’s insurance products;

Require the prior approval of the Registrar of Insurance Companies.”

The investments were not repaid within the time given. CLICO, however, requested to meet with the Minister of State for Finance to inform its position. The Minister agreed to a meeting which was scheduled for January 29, 2009, which CLICO subsequently requested be rescheduled. The new meeting was rescheduled for February 5, 2009, which CLICO also failed to attend.

On January 30, 2009, it became clear that CL Financial Limited, the Trinidad-based parent company of CLICO, was in serious trouble as the regulators in that country intervened in the company’s operations citing shortfalls in its assets of the banking and insurance operations.

As CL Financial was the guarantor for the advances that CLICO made to CLICO Enterprises Limited for the Florida real estate project and given the difficulty that CLICO was having meeting its obligations, it became clear that further and drastic steps had to be taken to protect the policyholders of CLICO both in The Bahamas and in its regional jurisdictions in the Turks and Caicos Islands and in Belize.

Following upon further recommendations by the Registrar of Insurance Companies, the Registrar of Insurance petitioned the courts to liquidate CLICO.

Mr. Speaker,

I stress that this decision 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 by the Registrar with the principals of the company over many months urging and directing them to inject additional capital and liquidity into the CLICO, without success.

The action was also precipitated by the continuing decline in the market value of the real estate investment in the United States via CLICO’s 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 CLICO to pay claims/surrenders of policies in one of the jurisdictions where it operates and the lack of a credible plan by CLICO 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 CLICO to the detriment of policyholders.

The overriding evidence suggested that in order to protect the policyholders, numbering some 23,000 in The Bahamas and 29,000 in the region, which is the ultimate responsibility of the Registrar of Insurance Companies, steps had to be taken to ensure that the assets of CLICO were not further compromised.

The liquidator has moved quickly to gain control of the operational affairs of CLICO, including taking steps to ensure that CLICO’s clients are able to obtain information relative to their situation. Naturally, there are a number of pertinent questions that arise following the Court’s granting of the provisional liquidation order.

Will Bahamian Policy Holders lose money?

Mr. Speaker,

I am advised that CLICO’s operations in The Bahamas has some 17,297 Life Insurance policies with annual premiums of $5.1 million; 11,230 Accident and Sickness Health policies with annual premiums of $3.2 million, 2,689 Annuities with annual premiums of $4.6 million and 7,402 Group policies with annual premiums of $1.8 million. All told, the total individual and group policies amount to some 38,618 with annual premiums of $14.8 million.

The many persons who own these policies would want to know if they stand to lose money. It is still too early to determine whether or not policy holders will lose any money. However, it is quite possible that all the policies can be sold to a viable insurer here in The Bahamas who can assume the business and provide the coverage that CLICO policyholders purchased without any loss to the policyholders

Should I continue making my premium payments?

The answer is yes. The Company’s principal office located at Mount Royal remains open for business. If the Liquidator enters into an agreement with a local insurer, he can only transfer policies that are in force and not those that have lapsed due to non-payment. The Liquidator will provide a full statement on this matter in short order to provide some practical guidance to the policy holders, I am advised.

Will the Government guarantee any losses to policy holders as was done in Trinidad & Tobago?

The Government does not anticipate providing any guarantees for the operations of CLICO Bahamas Limited.

What happens to my premiums which were paid to the CLICO after the liquidation was announced?

Those payments are being held in a separate account by the Liquidator for which full accounting is being made. If the Liquidator fails to reach an agreement to sell to a local insurer, all funds collected by the Liquidator from February 25, 2009, will be immediately returned to policyholders and annuity depositors.

Can I expect payment of a claim that I make?

It is best that the Liquidator be contacted directly in each case where a claim is made.

Will Annuity depositors and other policyholders be treated equally?

Yes. The discussions that will be held between the Liquidator and the local insurers will include benefits for both policyholders and annuity depositors.

Are the financial problems of CLICO a symptom of the industry as a whole?

No. 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 investment policies.

What is to happen with CLICO’s staff?

CLICO’s sales staff of 90 persons has been advised not to report for duty as the Company is not writing any new business. Sales persons essentially work on commission. The administrative staff of 51 persons remain in place and at work, I am advised, until further notice.

Mr. Speaker,

I believe that it is in the best interest of all to allow the Liquidator to develop a financial package for discussion with the various insurance providers.

This exercise effectively began on Wednesday of last week, 3 working days ago. Given the magnitude of the task, we believe that by this weekend, the Liquidator should be closer to finalizing a financial package.

I should note here that I received several telephone calls from the President of Guyana following the announcement regarding the liquidation order. He expressed that some 53% of GLICO’s (Guyana) assets were tied up in the CLICO Bahamas operations. While there appears to be no record available at this time on this matter, it will be for the Liquidator to determine Guyana’s claim. Guyana’s claim does, however, represent a very serious potential impairment for the Guyana operations. As you know, since our actions here, Guyana has put its CLICO operation into judicial management. We have undertaken to keep Guyana updated as matters progress. We are doing likewise with the Turks and Caicos Islands and Belize – both of which were consulted in advance of the petitioning for CLICO’s liquidation.

The Government regards this matter as a very serious one and will continue to monitor the situation with CLICO and provide regular updates to the public.


  1. I would just like to know when there is going to be a transfer of these active policies. My family has been keeping our policy active just for this reason but there is no updates or sign of hope. I am demanding a refund from February 25th 2009, so that i can get new insurance for my family, this is outright disgust and neglect.

  2. Omar and Disgusted, when you guys decide to sit to the computer and type you should have all your supporting documents beside you. Thomas i am no FNM but i agree with you! Joe thank you for clearing up the times the monies went out of the country which was 2004 to 2006 and which goverment was in power?….take a wild guess! Clico is a private company that invested and got huge returns on it investments. There was no questions being asked when investors where getting high interest rate returns. Anyone knows insurance, knows that insurance exists for risks and it can be good or it can be bad you can’t have it both ways.

  3. You all tend to ignore the FACT that the bulk of the money in question was moved out of the Bahamas in 2004 and 2006. If the P.M. is doing anything he is protecting his friend once again.

  4. Anyway Thomas on the real though, stop kissing up to your FNM buddies. They know far more than they are saying just admit it. Trust me on this one my friend. They knew..just leave that

  5. ahhhhaaaaa THE COOKIE MONTER!!! that was a good one Thomas. I am falling out of my chair. He really looks like Cookie Monster….lol lol I’m crying

  6. Imagine an international company, or the many banks here…they move dough around all the time I would imagine, and who is to say that the money was physically here to start? This is the elctronic age Wow!

  7. Wow!, you are a numbskull if you belive what you wrote. They do not need government’s approval to send money out of the country.Have you ever bought a draft? I never once saw the cookie monster, James Smith, or Hubiggety’s signature on my approval documents, and I have sent money out of the country many-a-time…get real!

  8. Thomas Finley :
    How the hell Mitchell know who Ingraham has spoken with or not spoken with? Mitchell is like a horde of sand flies, very annoying.Clico is a private company, and no one was forced to buy their products, and the government certainly did not cosign anyone’s contracts.

    The only way that CLICO could send the 74+ million dollars out of the country to be lost in Floridian real estate investments is with government approval. HI and the FNM know a lot more than they are owning up to.

  9. Thomas is one of those Free Market bloodsuckers who don’t believe in the existence of a middle class. Just the rich and the poor they exploit. We’re on to you Finley, you can’t hide and your FNM can’t hide either. As Disgusted said, no need to worry about reelection. You’re done if your precious PM doesn’t do more than make excuses for why he isn’t doing anything. He was elected to lead and was supposed to be “Simply the Best” so he needs to go back and be the “Delivery Boy” for more than just the Eastern Road and get us out of this mess. It’s a Matter of Trust, remember?

  10. But Thomas – the Government is the regulator and as the regulator they are fair game in the event of such a collapse.

  11. How the hell Mitchell know who Ingraham has spoken with or not spoken with? Mitchell is like a horde of sand flies, very annoying.Clico is a private company, and no one was forced to buy their products, and the government certainly did not cosign anyone’s contracts.

  12. If the prime minister does not fix this mess his party need not worry themseleves with re-election. People are already pulling hairs trying to make it through this economic crisis… and now this. !! what else will be done to us. Huge investments were made with this company we feel raped.

  13. 4th March, 2009

    News Statement by
    Fred Mitchell,
    Member of Parliament
    Fox Hill Constituency
    Opposition Spokesman on Foreign Affairs
    & Foreign Trade

    The policy of the Hubert Ingraham administration on CLICO shows the failure of the FNM’s policies in foreign affairs and foreign trade. The Prime Minister and Minister of Finance refuses to confirm that his Government did not directly intervene with the Government of the Trinidad and Tobago, the ultimate owner of CLICO.

    This default and omission by Mr. Ingraham is all the more glaring when one considers that Mr. Ingraham at the start of his term announced that in his relations with CARICOM he would be stressing functional co-operation. There appears in the matter of CLICO to have been no functional co-operation at the political level. We heard from our Prime Minister that the President of Guyana called the Prime Minister of The Bahamas to enquire about CLICO’s Guyana’s assets in CLICO Bahamas. Yet on the face of a Government guarantee by the CLICO company in Trinidad, now apparently owned by the Government of Trinidad and Tobago, our own Prime Minister of The Bahamas cannot say whether he has spoken to the Prime Minister of Trinidad and Tobago about this matter.

    The former Prime Minister of Barbados, Owen Arthur has suggested that since this is a trans border, CARICOM-wide issue, all Heads of Government should get together and in the spirit of functional co-operation settle the CLICO matter and other trans border financial services issues.

    Prime Minister Ingraham is on the bureau of CARICOM and can seek to convene an early meeting of Heads, but he so far he chooses to do nothing.

    The concern about this Government’s actions continues to grow when one sees the listed assets of CLICO Bahamas which include 14 million in cash. It raises whether there was any risk to the company that would have required a liquidation order and whether or not there was any conflict of interest or any insider trading or any disposition to allow a raid of the assets of CLICO in The Bahamas.

    There must be full and frank disclosure by all public officials involved in this matter.

    — END —

  14. Prime Minister Hubert Ingraham and Alexeou Knowles are friends and I know for a fact he was aware of the financial whoas of CLICO from mid last year. Yet he said absolutely nothing. This is just another chapter in his TRUST agenda. Now people are finding out the truth about this mad man. It would not surprise me one bit if he has shares in this company. Why don’t you all ask for all shareholders in CLICO to be made public? Then it would be made clear why this happened like it did.

  15. Customers flocking CLICO for answers
    By Stabroek staff | February 28, 2009 in Local News

    Following Thursday’s announcement by President Bharrat Jagdeo that the assets of CLICO (Guyana) have now been placed under judicial management, customers of the insurance company continued to flock the company’s Head Office on Camp Street yesterday to enquire about their policies.

    Many had gathered with the intention of closing their accounts, this newspaper was informed but were told this was not possible.
    When Stabroek News visited the company’s Head Office yesterday shortly after 11:00 am there was once again much activity with several persons requesting to surrender their policies.

    At the time this newspaper visited, only one clerk was dealing with the customers at the time. The other members of staff were in a meeting with Commissioner of Insurance Maria van Beek, who has been appointed to manage the affairs of the company. Repeated efforts yesterday to contact van Beek for a comment on this meeting failed.

    During his press conference, Jagdeo said that van Beek is expected to make a full assessment of CLICO’s financial position and report to the High Court within a few days. She is expected to undertake an inventory of the local company’s assets and offer critical advice on the future of CLICO (Guyana). Issues relating to staff reduction are also expected to be handled by the Commissioner.

    However, some of the customers gathered were clearly worried. An employee of Guyana Power and Light (GPL) told this newspaper that he had two policies- a life and a health insurance- and was moving to have them both closed. According to him, he was told that not much could be done at this time.

    He was informed that the firm was still accepting claims which they said will be processed.
    Yonette Sullivan was another customer who had gone to the office to enquire about her two policies. She was informed that since one of her policies was only opened in December she would not be able to receive any payments on it.

    The woman stated that she will now be moving to have both her policies closed considering the current situation. She said that she now had no trust in the financial institutions in the country since “they all were seemingly falling apart.”

    CLICO (Bahamas)
    Meanwhile the decision by the Bahamian government to send CLICO (Bahamas) into liquidation has caused the company’s clientele to become concerned about their investments, a report in the Freeport Newspaper said.

    One client, businessman David Burger, who has life and health insurance policies and a saving plans with the company, said upon hearing of the troubles CLICO was having in Trinidad at the end of January he decided to withdraw his money from his savings plan. However, when he visited the CLICO office two weeks ago, he was told that that there was no need to worry. He was even given a key chain and a cup and reassured that everything was fine.

    However, when he returned a second time to close his savings plan, he was informed that he would not be allowed to do so.
    According to Burger, he is in need of his funds immediately to help sustain his 10-year-old business, which he said suffered from the economic downturn. He explained that he was on the verge of having to shutdown and stated that he was depending on personal finances to keep the business open but stated that without the availability of these funds, he will be forced to close his business.

    He threatened to take legal recourse if he was forced to close his business: “Believe me, if my business fails in the next month and I had money that should have been available to me to keep my place open and to keep my people and now it’s not available, I will certainly be taking legal action.”

    CLICO (Bahamas) has been sent into liquidation as a winding-up order was granted by the Supreme Court appointing Craig Gomez of Baker Tilley Gomez as liquidator for the company.

    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,” a statement issued by the Office of the Registrar of Insurance Companies on Tuesday said.

    CLICO (Guyana) had invested 53% of its assets in the Bahamian company. Although these investments were liquid on paper investigations have revealed that this sum has been tied up in real estate investments that the CLICO (Bahamas) had in Florida.

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