Escaping the CLICO maze
The monies paid in by clients to CLICO have been characterised by the Government as either insurance products or short term investments. It is a stubborn, artificial and incorrect distinction. It is also one that is in the Government's interest to make, as both a defender and a major shareholder of CLICO.
To strip the short term investments of their life insurance
character the Government has rebranded them STIPS. That makes a big
difference to the politicians past and present, the Central Bank and the
Supervisor of Insurance. Regulators owe a duty of care to the insurance
policyholders, based on the statutory set-up of the Insurance Act but
it is not a duty starkly owed to investors.
What the Government wishes by the settlement documents to unseat is the argument of much deeper and wider duty under the Insurance Act to protect the public from the grey areas of both the law and the industry. Still it is a duty contemplated by the decades-old insurance regime and the failure to act before early 2009 is evidenced by a plethora of measures — legislative, policy and administrative — taken by the Central Bank since the HCU and CLICO cash gridlock.
The monies paid in by clients to CLICO have been characterised by the Government as either insurance products or short term investments. It is a stubborn, artificial and incorrect distinction. It is also one that is in the Government's interest to make, as both a defender and a major shareholder of CLICO.
What the Government wishes by the settlement documents to unseat is the argument of much deeper and wider duty under the Insurance Act to protect the public from the grey areas of both the law and the industry. Still it is a duty contemplated by the decades-old insurance regime and the failure to act before early 2009 is evidenced by a plethora of measures — legislative, policy and administrative — taken by the Central Bank since the HCU and CLICO cash gridlock.
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