CLICO gets new name
Asha Javeed email@example.com
That’s the name Government has selected to rebrand the collapsed Colonial Life Insurance Company (CLICO).
While the government had given a commitment in its 2012/2013 budget that CLICO will cease to be in January 2013, the Sunday Express understands that there are some legal hurdles with the name change and application, given the different non-traditional businesses owned by the insurance company.
It is expected that the insurance policies of CLICO and British American Insurance Company will be transferred to the new company.
The behemoth insurance company serves approximately 200,000 customers and its imprint on the country’s financial landscape was so deep that when it went belly up in January 2009, the government was forced to intervene because of the systemic risk it posed to the rest of T&T’s financial system.
The government’s bailout of CLICO stands at $19 billion.
CLICO was an insurance company formed by Cyril Duprey in 1936. The company was passed on to his nephew Lawrence Duprey in 1988 who expanded it beyond its traditional business.
Subsequently, Duprey set up a holding company, CL Financial as a multinational conglomerate with CLICO and CLICO Investment Bank (CIB) as its cash-cow subsidiaries.
By then CLICO and British American, aided by CLF, had long since expanded beyond the remit of any insurance company—with expensive real estate investments in Florida costing hundreds of millions of dollars.
The majority of the billion-dollar bailout was spent repaying policyholders of CLICO and British American’s Executive Flexible Premium Annuity (EFPA) which was a facility created by CLICO to raise money and bore an above market, annual interest rate of ten per cent.
The tale of how CLICO came to be and the inner workings of this private company have been brought out in various witness statements during the Sir Anthony Colman Commission of Enquiry which is expected to be concluded this year.
In January 2009, Duprey approached the government cap-in-hand for a bailout of the insurance company which had become illiquid and bore a hole in its Statutory Fund. Duprey’s empire, which comprised some 65 companies in 32 countries, was caught in a “perfect storm” of economic collapse.
Government has attempted to bring the CLICO issue to a close and has made a claim to CL Financial for sums owed.
CL Financial is seeking to dispose of assets to meet the government’s claim.