CLICO Bahamas in liquidation

NASSAU, Bahamas, February 26, 2009 – The High Court in the Bahamas has ordered the liquidation of a local subsidiary of Trinidad and Tobago’s troubled conglomerate CL Financial Limited.
The winding-up order for CLICO Bahamas Limited was issued this week following an application by the Minister of Finance who is also Prime Minister Hubert Ingraham, in order to protect CLICO policyholders, according to a release issued by the Office of the Registrar of Insurance Companies.
“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,” the statement said.
“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 CL 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 continued that a delay in taking action would only further erode the assets of the company to the detriment of policyholders.
“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 release added, noting that at the end of 2007, the domestic insurance industry had 52 local companies and branches of foreign companies, over US$1.2 billion in assets and total gross premiums of US$701 million.
“CLICO Bahamas represented less than one per cent of the total assets and less than one per cent of the total gross premiums. The financial difficulties of CLICO Bahamas are a direct result of the company’s business model and investment policies,” it added.
“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.”
The Office of the Registrar of Insurance Companies further advised policyholders to consult with their financial advisors on the actions they should now take.
CLICO Bahamas Limited (formerly British Fidelity Assurance Limited), a subsidiary of CLICO (Holdings) Barbados Limited and a subsidiary of the CL Financial group, operated in the Bahamas as a part of the CL 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 and Caicos Islands, as well as run-off business in the US Virgin Islands, Cayman and Barbados.
It has just over 29,000 policyholders, over 170 staff and over US$100 million dollars in policy liabilities, the majority of which are in the Bahamas.