Some CLICO and British American Insurance policyholders are anxious and concerned following this month’s dismissal of the class action suit a group of Barbadians brought against Canadian insurer Manulife.
But the group formed to represent the interests of these CLICO and BAICO customers, the Barbados Investors and Policyholders Alliance, has told them the situation and their entitlement were different.
BIPA Chairman June Fowler offered the explanation as she sought to make it “very clear that the current status of the Manulife case is in no way an indicator of either the outcome or the timescale for a CLICO or BAICO solution”.
“A number of CLICO and BAICO policyholders have contacted … BIPA … expressing anxiety and concern at the recent failure of the class action lawsuit against Manulife in Canada after 10 years of legal battles, and are wondering if this is an indicator of the potential timeline and outcome of the CLICO/BAICO debacle here in Barbados. BIPA wishes to assure policyholders that these are totally different scenarios,” she said.
“It is actually the policy funds of CLICO and BAICO which have been mishandled and are being withheld due to the insolvency of these two companies, whereas the money being claimed by Manulife policyholders was not the principal and interest on their policies, but a ‘bonus’ allocation of ‘free shares’ optionally convertible into cash, which are traditionally awarded following the demutualisation of a mutual society like Manulife,” she added.
Fowler noted that “the problem with Manulife, which has nothing in common with the CLICO and BAICO fiasco, is that Manulife sold its insurance business to the former Life of Barbados in December, 1996”.
“But at that time, Manulife was still a mutual life insurance company, and was not demutualised until after the sale to Life of Barbados. On the demutualisation of Manulife, its participating policyholders were paid $17.7 million in cash or shares,” she stated.
“According to the judgment handed down by the Ontario Superior Court, by then, the insurance business had already been sold to the former Life of Barbados, so the Barbadian policyholders did not receive any compensation, since it was determined they were no longer Manulife policyholders and therefore did not qualify for the ‘bonus share out’.”
The official said this was a “sharp contrast” to the CLICO and BAICO situation.
“It is the actual savings and policyholders’ funds of CLICO and BAICO which have been mismanaged, and unlike the legal battles to prove that Manulife policyholders are entitled to their ‘bonuses’, there is no question whatsoever that CLICO and BAICO policyholders are fully entitled to the return of 100 per cent of their principal and interest,” she said.
“Nor is there any excuse for the litany of delays and procrastination in providing a satisfactory solution and organising an orderly payout.” (SC)