The group representing CLICO policyholders in Barbados is finally seeing “light at the end of the tunnel” with Cabinet’s approval of a plan to compensate them, but they still want more clarity about aspects of the plan that is supposed to get them their money back.
President of the Barbados Investors and Policyholders Alliance (BIPA), June Fowler, said in a statement today that issues related to Executive Flexible Premium Annuity (EFPA) policyholders are of particular concern.
Late yesterday, five years after CLICO’s financial collapse, judicial manager Deloitte Consulting Ltd announced that Cabinet had approved the terms, conditions and actions to be taken to get compensation for policyholders, as set out in the restructuring plan. That plan envisages the creation of a new insurance company (NEWCO) – by the end of this year – to take over CLICO’s insurance business, and the creation of separate entities that will own the real estate and other assets.
The alliance said it was pleased that there was now a projected timeline for completion of the plan.
However, Fowler said: “BIPA has requested a meeting with the CLICO judicial manager in order to go through, in detail, a number of elements of the plan, including the projected process and timing of the approval of the Court; the setting up of ‘NEWCO’, its ownership and management; and the latest position on the interest expressed by Canada Loyal Financial, and any other parties, in taking over the operations of CIL.”
She added that BIPA would be asking for more detailed information on the Special Purpose Vehicle (SPV) to deal with CLICO’s real estate.
Under the plan, policyholders with traditional insurance policies, such as life, health and pension plans, will receive the full value of their policies with the support of the Government. Individual EFPA policyholders will receive the value of their principal investment, with their policies converted into annuity products payable over a period of up to ten years, while other EFPA policyholders will get shares in the property holding entities.
Fowler wants clarity regarding the treatment of the EFPA policyholders.
“We need a clear interpretation of the meaning of ‘principal’ insofar as it relates to individual EFPAs, as well as specific details on the nature of the annuities being offered to the EFPA policyholders, including the proposed interest rate, term
and early cash-out options, especially for older policyholders,” she said.
The BIPA president said policyholders had suffered many delays and setbacks along the way and she hoped all parties would cooperate to ensure that the process from this point forward is “unhindered and finally leads to a satisfactory conclusion by year end”. (DP/PR)