Prior to collapse of Clico Barbados, the department of the supervisor of insurance composed a staff of 19 persons who reported to the minister of finance through the permanent secretary. At that time, Owen Arthur was Prime Minister of Barbados and served in that position between 1994-2008. Following the elections in 2008 one year before the collapse, the Democratic Labour Party became the government of the day.
Subsequently David Thompson became Prime Minister. Essentially the political environment in which Clico operated was based mainly on associates. Indications are that the politics of the day greatly influenced the operations of Clico Barbados. Mr. Parris who was chairman of Clico Barbados was considered to be associated with both political parties in Barbados. However, he was inclined to favour the DLP.
Consequently, the senior decision makers/directors were mainly members of the DLP & to some extent this was seen as a conflict of interest. In addition to being the chairman of Clico Barbados, Mr. Parris was the chief executive of a company called Professional Financial Services Inc. This relationship between Clico Barbados & PFSI by virtue of Mr. Parris’s position reinforced the argument that there could be conflict of interest. Indeed a contract which was signed on the 15th of May 2005 attracted the public of interest.
Subsequently to the collapse, Mia Mottley saw this as being corruptive and represented it as “sweet heart contracts”. It is of significance that the contract was legally put together ; witnessed by persons from the law firm Thompson ; Associates which provided services to Clico Barbados as well as PFSI. In addressing the possibility of corruption due to the close relationship between PFSI, Thompson ; Associates ; Clico Barbados, Ms. Mottley stated that if by chance Mr. Parris was found guilty of misconduct, he would be immune to damages and would be assured $10 million that Clico Barbados would have to pay to Parris for services rendered. Prior to the collapse, a number of concerns were raised about the operations of Clico Barbados ; its political interrelationships with the government of the day.
On several occasions, the supervisor of insurance, William Belgrave as far back as 2002 expressed that department’s concern over Executive Premium Annuities that were offered by Clico which could not be offered by credit unions. However, since he did not have legislative power to intervene, nothing was done. It was evident that the collapse of Clico Barbados resulted from poor corporate governance as well as the inclination to act as though there was no specific law or regulation governing the company. Given the combination of poor corporate governance & the lack of action by regulators Clico Barbados was free to act in its own interests without regards to stakeholders, shareholders, management etc.
The result is that Clico became bankrupt and had to be put in the hands of receivers & effective government intervention to aid depositors & policy holders as they still await the outcomes of the actions of receivers and legal interventions.