With the eight-year wait for more than 20,000 policyholders in CLICO now seemingly coming to an end, Chairperson of the Barbados Investors and Policyholders Alliance (BIPA) June Fowler is sounding a stern warning to local authorities that this situation should never be allowed to happen again.
Earlier this week, the High Court approved the transfer of assets and insurance policies from CLICO International Life Insurance Company to New Life Investment Company Inc (NLICO) and Resolution Life Insurance Limited (ResLife), paving the way for payments to be made to the policyholders who were left out of pocket after the collapse of CLICO’s parent company back in February 2009.
The much-anticipated decision came two months after it was expected and eight months after agreement was reached between CLICO, NLICO and ResLife last December.
While welcoming the latest development, Fowler is warning that there should be no such recurrence.
“Now that we have a regulatory body in place hopefully all that happened in the past will no longer happen,” she told Barbados TODAY, while suggesting that final responsibility rests on the shoulders of the regulatory authorities.
“The Supervisor of Insurance should have done what they were supposed to do and this thing would not have happened. So I would like to think that with the Financial Services Commission in place, what happened in the past with CLICO will not happen with this new entity, Resolution Life,” she added.
The Financial Services Commission was established until April 2011.
Fowler explained that following the High Court’s approval this week, there will be a 90-day “bar date period” in which a number of processes will have to be carried out, including the verification of policyholders information before the transfer can actually take place, hopefully by December.
“At the end of that and if there are no major issues, the transfer then should take place from the judicial manager to Resolution Life and then there is a two-week period for them to get their process together once the transfer has taken place,” she told Barbados TODAY.
“Hopefully after that two-week period, which should take us down to, let’s say conservatively, the end of November to early December, we should start to see death claims and mature claims and pensioners starting to get some level of payments, and policies that are currently active will be transferred and people can continue to pay their premiums,” she added.
Acknowledging that it had been a very long process, Fowler said BIPA members were simply waiting to exhale.
“It is good news. It is not the end of the process yet but it is part of the process we were looking to happen . . . So we are grateful that it has come to this point and we are at a stage where the transfer agreement has been approved by the court,” she said, while calling on relatives of policyholders who have died to “stay on top of things on behalf of their relatives”.
Government has allocated close to $30 million in this year’s Estimates of Revenue and Expenditure for the payment of the first tranche of its $300 million debt, which is to be paid over ten years.
Of the sum, $25 million has been set aside for CLICO policyholders and $4.9 million for investors in its sister insurance company British American Insurance Company (BAICO).
The transfer of the BAICO business to Sagicor, which was expected to be completed by May 31, 2017, is still held up due to a back and forth between the Ministry of Finance, Sagicor and the BAICO judicial manager, KPMG, following several concerns raised by Sagicor, including about Barbados’ economic downgrades and Government’s financing.
Barbados TODAY understands that Sagicor is now awaiting final word from the Ministry of Finance on some of the issues raised, following a meeting last month.