CLICO policyholders face further setback
Policyholders of CLICO International Life Insurance (CIL) who have been awaiting a financial settlement which has been dragging on since the company’s collapse in 2009 have received a further setback and do not now know when they will receive payments on their investments.
A resolution to the matter has been deferred indefinitely as expectant representatives of the policyholders await a ruling from the High Court in Barbados. They were hopeful of a resolution last week when they, along with other stakeholders, met with the judge presiding over the case. Instead they were delivered an additional dose of disappointment.
The court is to decide on a proposed Barbados plan to restructure the beleaguered insurance company on behalf of policyholders here and in member countries of the Organization of Eastern Caribbean States (OECS).
“What I would say is that we are disappointed that the decision from the court is taking this long. We know that the judge has a critical role to play in making the best decision for all policyholders, including Barbadians and regional policyholders, but we did not anticipate it taking this long; because now all the timelines that were to be met based on the Barbados first proposal would have to be pushed back and pensioners have not been receiving any pension,” chairman of the Barbados Investors and Policyholders Alliance (BIPA) June Fowler told Barbados TODAY this afternoon.
Fowler said it was disheartening that BIPA members had been forced to wait this long, but noted that she was hopeful of a settlement by year end.
“We’re still remaining hopeful that we can have a decision before Christmas and a favourable one,” she said. “Not just a decision, but a favourable one before Christmas,” she repeated.
The judicial manager, who had earlier asked the court to liquidate CIL due to a lack of financing from the Stuart administration, has since reversed this position after meeting with Government officials, and has withdrawn the request to liquidate the company.
The judicial manager has instead agreed to approve the restructuring plan, to be financed by the Barbadian taxpayer.
The plan, referred to as “Option One”, and yet to be approved by the High Court, provides for the formation of a company called New Life Investment Company Inc (NLICO), “which shall, on or before 31 October, 2015, issue bonds to CIL valued at about $34 million.”
NLICO and the judicial manager are to agree the real estate assets in Barbados to be transferred to NLICO by CLICO, which would then transfer these assets to the investment company before October 31, provided that the value of those assets is equivalent to the worth of the bonds.
The court had been hearing evidence from the judicial manager’s representative Patrick Toppin, who was being cross examined by Queen’s Counsel Ralph Thorne on behalf of the policyholders challenging the restructuring plan, and the attorney for the East Caribbean Currency Union (ECCU) Sir Richard Cheltenham, QC, who has been working in association with Shelly Seecharan.
Earlier this year, St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves wrote his Barbadian counterpart complaining of what he called a “Barbados-only” plan for policyholders, and reminding Stuart that the people of the OECS also invested in CLICO.
When contacted at the time, Dr Gonsalves told Barbados TODAY he was giving Prime Minister Stuart time to respond.
BIPA, which has been battling on behalf of investors and policyholders, has sanctioned the restructuring plan and has withdrawn its own court application against the judicial manager.
The plan would allow for the appointment of a BIPA representative to the Board of Directors of NLICO and a director on the board of the new insurance company, which is to be established.
The court has given the judicial manager $4.5 million in interim financing to sustain its operations between now and when the court process is complete.
A board of directors of the new company has already been established.