Bahamians had more than 400 annuities worth US$23m with CLICO

Investors deeply troubled – Nassau Guardian

Even as sections of the local media have had to endure official criticism for what has been labelled irresponsible reporting on the CLICO crisis, the Bahamian newspaper, the Nassau Guardian has been investigating and disclosing details of the number of impaired investments arising out of the collapse of CLICO’s operations in the sister CARICOM country.

20090320nassauIn an article published in its March 10th issue the newspaper released details of its probe which provides details of the number of investments that are threatened by the CLICO crisis and the range of Bahamian public and private sector entities that have been ensnared in the meltdown.

The Nassau Guardian says that its probe has revealed that local religious leaders, professionals, businesses, churches and two government entities collectively have nearly 400 annuities totalling US$23m on CLICO’s books. According to the article these range from under US$100,000 to several million dollars and deposits by several local physicians,

The Nassau Guardian article says that employees of the state-run airline Bahamas Air and the Bahamas Broadcast-ing Corporation are among the hapless victims of the CLICO collapse. The former is reported to have almost US$43m in annuities tied up in CLICO.

In Guyana, information on the CLICO saga has been forthcoming mostly through assurances by President Bharrat Jagdeo that investments in CLICO are not seriously threatened by the crisis though there is mounting evidence of vastly diminished confidence in the once powerful insurance company.

The local media, however, has been hard-pressed to secure reliable information with regard to the scale of local investments with CLICO and the state media and sections of the private sector have asserted that some media reports on the matter have been sufficiently alarming to threaten public confidence in the financial sector.

This newspaper understands that the company’s court-appointed Judicial Manager, Commissioner of Insurance, Maria van Beek has begun to hold meetings with members of staff of the company. While declining to disclose the details of their meetings with Ms. van Beek, a source told Stabroek Business that while her frankness about the extent of the CLICO crisis has been well-received, some employees have been left with the impression that there is no longer any future for them with the company. The source said that some members of staff had already begun to “pack their things” in anticipation of an imminent exit from the company.

Meanwhile, the Nassau Guardian article says that local investors in CLICO annuities are “said to be deeply concerned about whether they will get a return on their investments or get back the money they put in.”

The Nassau Guardian article says that discussions involving the liquidators and prospective buyers will discuss, among other things, “benefits for both policy holders and annuity depositors,” However, according to the article, Prime Minister Hubert Ingraham subsequently said during a parliamentary engagement with opposition parliamentarians that “annuity holders are not likely to be as favorably rewarded at the end of the day as some policy holders.”
The Bahamian Prime Minister is also reported to have pointed out that annuities and policy holders have little protection under the law since “there is no provision in the law relating to annuities taken out with insurance companies.” Mr Ingram is also reported to have said that even if such provisions had existed the chances of them “kicking in for persons who have annuities between US$70,000.00 and US$400,000.00 would not likely be something that The Bahamas would have guaranteed in the first place.”

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