Sagicor lifeline for Clico - best bet
Thursday June 02 2011 | 06:00 AM

A takeover of CLICO International Life by Caribbean insurance giant Sagicor will present some concerns about market control by one player.

However, William Layne, retired permanent secretary in the Ministry of Finance, says the only way that confidence will be significantly restored to the shaken life insurance industry in the Eastern Caribbean is to have a strong company like Sagicor take control of the CL Financial subsidiary.

Two weeks ago, Sagicor president Dodridge Miller revealed that his company wanted to buy the CLICO insurance assets in Barbados and Trinidad and Tobago.

He said Sagicor was best placed to find a resolution to the CLICO matter. The Sagicor Group posted increased first quarter revenue of US$345.9 million, though it took a US$36.2 million hit from losses by British subsidiary Sagicor at Lloyds.

Layne, who headed the special Oversight Committee set up by Government to control CLICO Holdings subsidiaries in Barbados, told BARBADOS BUSINESS AUTHORITY, “Effective regulation can deal with the risks of market concentration issues and the Fair Trading Commission will try to ensure that there are no negative effects of having one major player.”

He added, “The key is effective regulation, good corporate governance that is also reflected in a strong board of directors that knows its role and is not doing the bidding of the chief executive officer.”

Layne, a chartered accountant known for his frank assessment of financial matters, said that given the present challenges of the insurance industry in the region, it might be best that there was one large strong company rather than several small ones.

“What really matters is effective regulation. If you have a company that is well managed and sticks to good insurance principles, then we shouldn’t have to worry too much,” he pointed out.

Meanwhile, Layne said in an address at the Institute of Chartered Accountants of Barbados’  annual general meeting last Thursday at Marriott Courtyard, that conglomerates that owned regulated entities should be made to submit consolidated accounts to regulators and where they were private companies, publish consolidated statements in the Press.

He told the accountants too that the book should be thrown at corporate executives held  legally accountable if their actions caused the demise of corporations.