Government assures policyholders some relief soon in CLICO matter

It is yet to be determined when persons who hold policies with CLICO International Life (CIL) will begin to see some relief.{{more}}

However, Prime Minister Dr Ralph Gonsalves has given the assurance that in the same way policyholders of British American Company (BAICO) have been enjoying some relief, CIL policyholders will see some relief soon.

“I want to assure persons at the beginning of the year that we are on top of this matter and our work is cut out again this year on it,” Gonsalves told members of the media last Wednesday.

The total value of CIL policyholder liabilities, as of March 31, 2012, amounted to BDS$837.4 million, a fraction of which were Executive Flexible Premium Annuity (EFPA) policies, Gonsalves said.

Total EFPA’s for the Eastern Caribbean Currency Union and Barbados was BDS$501.7 million and non-EFPA’s was $335.7 million.

Policyholder liabilities in St Vincent and the Grenadines are BDS$97.1 million, with EFPA’s amounting to $58.6 million and non-EFPA’s $38.5 million Gonsalves said.

“We have not made as much progress because they (CIL) started the process with the judicial manager almost two years later than they started with BAICO,” Gonsalves explained.

He added that there was an attempt made to address the issue using a number of administrative means.

“Very early we realised in BAICO that we had to go to judicial managership, because in the case of BAICO, if you went for a dissolution of the company, the policyholders would have gotten a number approaching zero…in the case of CLICO the assets are a percentage of the market value liabilities was 53 per cent which means 53 cents of the dollar,” the prime minister explained.

Similarly, he explained that if the company’s assets were to be liquidated, that the real estate would have been sold off quickly and at a lower price.

“So we have to look for a solution how far we can carry that 53 cents,” he said.

Forensic work is also expected to be done to determine if lawsuits can be brought forward; however, the extent of the contribution from the government of Barbados towards the solution is yet to be determined.

No money will be made available from Trinidad, as in the case with BAICO, Gonsalves said, because this had nothing to do directly with that country.

The problem is, however, a regional one and requires a regional approach, similar to what was done with BAICO.

A decision was taken at the meeting of LIAT shareholders in Barbados on December 28 that the core committee of the Currency Union would work with the judicial managers and with the Barbadian government to see what solutions they can bring, Gonsalves said.

He added that it was expected that something would be put to the Barbadian government by March this year, but that there was still a fair amount of work to be done here as well.

“We have to find a fair and reasonable solution…but we have some complexities of a different kind,” he said. (DD)