Clico Cayman in hotwater too!!!

The Cayman Islands Monetary Authority has instructed Clico (Cayman) Ltd to stop its public investment business activity until company accounts are approved by the Authority.

A CIMA media release stated that in an order issued last Tuesday (3 March), it told Clico (Cayman): “Immediately (I) Cease or refrain from issuing new policies with investment features until the asset level in its trust fund has been increased to the required level and approval is granted by the Authority for the Company to resume such activity; and (ii) Cease or refrain from receiving any new premiums on existing policies with investment features until approval is granted by the Authority to resume such activity”.

In a press release issued on Friday, CIMA states that the instruction to Colonial Life Insurance Company (Trinidad) Limited, trading as Clico (Cayman) Ltd further required the company to “…take certain actions within a prescribed time frame and imposed additional reporting requirements on the Company to better monitor its business activities and financial condition”.

By way of background to its reported action CIMA stated in the Friday release: “On January 30, 2009 the Government of Trinidad & Tobago and the Central Bank of Trinidad and Tobago (“the Central Bank”) announced that the Government had reached an agreement with the CL Financial group (the parent company of CLICO) for the provision of a package of financial support for the group’s financial services companies. As a result of the above action CLICO is now under the control of the Central Bank and Mr Andrew C.

Musaib-Ali has been appointed as managing director. Mr Musaib-Ali reports directly to the Central Bank”. Subsequent to the action in Trinidad and Tobago there have been reports coming out of Guyana, Barbados and The Bahamas of what may be financial irregularities in relation to CLICO-affiliated companies. The CLICO firm in Barbados reportedly does not have the full monetary amount required by statute as security for deposits made by investors. This alleged violation is said to have been happening for some years now.

In Guyana, authorities have reportedly discovered that monies the CLICO office there invested in CLICO Bahamas is missing, although the assets in question are said to appear in the audited accounts of both companies.

The Guyana situation is further complicated by reports that a major investor in CLICO (Guyana) Ltd, the National Insurance Scheme (NIS), is dependent on returns from that investment to pay pensions and other workers’ benefits. NIS is a government-owned authority that by law collects contributions from every company in Guyana on behalf of workers for pension payments and other industry-related compensation.