May 12, 2021

CLICO policyholders disagree with Barbados central bank governor’s statements

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images-Caribbean-clico_743454784From Caribbean360

The Barbados Investors and Policyholders Alliance said it had observed that the Central Bank Governor “was very careful to use words like “may not” or “might have”, in his statement.

BRIDGETOWN, Barbados, Thursday March 6, 2014, CMC – The Barbados Investors and Policyholders Alliance INC (BIPA) says confusion surrounds a recent statement by Governor of the Central Bank, Dr. Delisle Worrell, regarding a possible solution to settle outstanding Colonial Life Insurance Company (CLICO) claims in Barbados and the Eastern Caribbean.

Worrell told the Caribbean Media Corporation (CMC) that the latest report from the judicial manager made to the Barbados court provides a way forward which seems fair to all stakeholders.

“What it says is that you may not be remunerated for interest that you might have accumulated, but we will at least ensure that you get a product which restores the principle value of what you might have invested with the company,” Worrell said.

But the policyholders say they are “bemused at the timing of the Governor’s announcement” given that unless a subsequent report has been issued unbeknown to BIPA, the most ‘recent’ Report by the Judicial Manager is dated June 14, 2013 and was submitted to the Court shortly after that date.

BIPA said it had observed  that the Central Bank Governor “was very careful to use words like “may not” or “might have”, in his statement, but that the June 14 report which received written support from the Office of the Minister of Finance “clearly states that the full value of all the traditional policies would be preserved, and that Executive Flexible Premium Annuities (EFPAs) would be replaced with a 10 year annuity.

“The conversion of the EFPA’s to an annuity reduces the Barbados EFPA liability from BDS$140 million (One BDS dollar =US$0.50 cents) to BDS$99 million which reflects a reduced value of money over time and means that EFPA policyholders get 71 per cent of their current principal balance.

“There was no indication in the Report or the Addendum that the annuity would pay interest.  It is clear then that there is no “restoration of the principal value of what you might have invested with CLICO” according to the Governor’s statement unless he is referring to a subsequent and as yet unreported document,” BIPA added.

BIPA has also taken issue with the statement by the Governor that the principle reason for the delay was to ensure that the new plan could be applied equally in Barbados and the Organisation of Eastern Caribbean States (OECS), and ensuring that all of the territories were on board.”

“BIPA is reliably informed that to date, promises of action in this respect remain unfulfilled. Whether or not the Government of Barbados actually makes its ‘manageable’ input, policyholders will still be left with an unacceptable shortfall in their policy values.

“However, once final figures are available, BIPA will instruct its attorney to continue to pursue, through the Courts, the recovery of any outstanding amount due to BIPA members from the directors and officers of CLICO and other associated parties,” BIPA said in a statement to CMC..

CLICO and its sister company, the British American Insurance Company (BAICO) collapsed in 2009 and the Trinidad and Tobago government signed a shareholders’ agreement with then CLICO chairman Lawrence Duprey following the signing of a memorandum of understanding (MOU) between them on January 30, 2009. The MOU gave the government control of 49 per cent of CLICO’s shares.

The then Patrick Manning government injected seven billion Trinidad and Tobago dollars (US$1.01 billion) into CLICO in 2009 to keep the collapsed insurance firm running and protect policy holders.

A few months later, through the passage of legislation in the Parliament, the Kamla Persad Bissessar led coalition People’s Partnership Government committed a further TT$13 billion (US$2.01 billion) to keep the floundering insurance company afloat.

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