CIMA moves to protect Clico policy holders

(CNS): A new cease and desist order has been issued to the troubled insurer Clico (Cayman) Ltd. by the Cayman Islands Monetary Authority (CIMA) prohibiting the firm from issuing insurance policies of any kind, except for new additions of dependants on existing individual health policies (family cover) or new additions of employees on existing group health policies. CIMA has also directed Clico to maintain all assets here in Cayman to ensure the satisfactory coverage of all its policy holder liabilities.

On 9 April CLico was also stopped from transferring any of its assets and funds to any affiliated company without the Authority’s prior written approval. The order not only restates the directive issued to Clico by CIMA on 3 March but also expands Clico’s reporting requirements as well as preventing the firm from issue any type of policy.

A public notice issued by the Authority said the cease and desist order was to safeguard the public interest and to protect the Company’s policyholders while CIMA continues its examination of Clico’s affairs. “The Authority requires the Company, among other things, to submit to the Authority, within a specified time, specified information on its health insurance policies, policies with investment features, and life insurance policies. The Authority has expanded the Company’s ongoing reporting requirements,” CIMA stated.

The notice states that CIMA expects Clico to continue to honour its obligations to its Policyholders. “The ongoing examination of the Company by the Authority does not preclude the Company from honouring these obligations,” CIMA said adding that because the investigation into Clico is ongoing it is restricted in its ability to provide full details on the matter. It said that it would however, provide updates to the public s as and when it is in a position to do so.

In its first order CIMA prevented Clico from new policies with investment features and refrain from receiving any new premiums on existing policies with investment features. At the time Clico issued a statement saying that was continuing to service all its existing policies and was fully available for client support. On Tuesday of last week the Supreme Court in the Bahamas ruled that CLICO Bahamas should be wound up, to safeguard the funds of policyholders, creditors and stakeholders of the company; and to clear the way for liquidation.

Colonial Life Insurance Company (Trinidad) Limited, trading as Clico (Cayman) Ltd., was licensed in April 1997 as an Approved External Insurer in the Cayman Islands under section 4(7) of the Insurance Law 1979. The Company is also an Approved Insurer under the Health Insurance Law. Clico (Cayman) Ltd. is a branch of Colonial Life Insurance Company (Trinidad) Limited. Colonial Life Insurance Company (Trinidad) Limited is a wholly owned subsidiary of CL Financial Limited. On 30 January 2009 the Trinidad government and the country’s Central Bank announced they had reached an agreement with the CL Financial 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 of Trinidad & Tobago and Andrew C. Musaib-Ali has been appointed as managing director.