CLICO Guyana Under Judicial Management
Having been placed under judicial management assets of CLICO (Guyana) were transferred to the supervision of the High Court, which appointed Commissioner of Insurance Maria van Beek to manage its affairs a point the way forward for that company.
By: gop - Friday, Mar 18, 2011 - 12:00:00 AM
CLICO Guyana was put under judicial management on February 25, 2009, one day after CLICO Bahamas, in which the local company had invested 53% of its assets, was ordered wound up. In his provisional report, the Bahamian liquidator, Craig Tony Gomez, while confirming Guyana's investment, sought to classify it as an inter-company advance, rather than a policy, reducing the likelihood of the investment being reimbursed. However, President Jagdeo has reiterated that Government will challenge this determination by the Bahamian liquidator.(Office of the President of Guyana)
On April 15, 2009, President Bharrat Jagdeo spoke on a CLICO report submitted by Judicial Manager of CLICO Guyana, Maria van Beek, which highlighted the assets and liabilities of the company, and what she has done during her appointment and her findings on the activities of the company.
The next morning, April 16, 2009, the Judicial Manager of CLICO Guyana, Maria van Beek was shot in the chess by a gunman, but survived.
On September 10, 2010, Acting Chief Justice Ian Chang ordered the liquidation of CLICO (Guyana) in a long delayed ruling that said available material pointed in the direction of its insolvency and against the interests of policyholders that it be allowed to continue.
On September 16, 2010, President Bharrat Jagdeo rolled out a rescue plan that guarantees refunds to all those who were affected by the company's financial dilemma. The Head of State explained that policyholders with investments in the company less than $30M as of February 2009 will be repaid in full.
Reasons for the CLICO 2009 Liquidity Crisis
Reasons that led to a liquidity crunch were, firstly, plummeting methanol and ammonia prices on the world market and secondly, over-exposure to commercial real estate. CL Financial is asset-rich (around TT$100 billion) but cash poor with liquidity problems.
This scenario was further compounded to fear in the economy which led to an unusually high level of withdrawal requests which placed further strain on available liquid resources.