The new court-approved firm set up to replace the collapsed CLICO International Life Insurance was formally launched this morning with assurances that the value of policyholders’ investments has been restored and safeguarded, despite changes to the contractual terms and conditions of several of their policies.
Chief Executive Officer Cheryl Senhouse told a press conference at Courtyard by Marriott in Hastings, Christ Church that Resolution Life Assurance Company Limited (ResLife) would preserve cash levels, while still ensuring all policyholders realize the intended benefit of their policies over the long term.
ResLife will begin monthly payments to annuitants at the end of next month.
“There have been no reductions to the insured values, sums assured or fund values for any transferring policies,” Senhouse said, adding that outstanding amounts due to annuitants, beneficiaries and claimants under life policies, would be settled over a six-month period starting in March.
The ResLife executive also said that due to the changes to the contracts, life insurance policyholders would not be permitted to surrender their policies for a four-year period, while there will be restrictions to access to cash surrender values through policy loans.
“The period for the application of surrender charges has been extended [and] the minimum guaranteed interest rates applied to universal life policies have been reduced,” she told the audience, which included Clenell Goodman, the executive chairman of ResLife and its parent company New Life Investment Inc.
Senhouse also assured that despite the changes, all claims and maturities arising from life policies from 1st January, 2018 will be processed and paid as soon as they were approved.
The ResLife executive announced that a number of amendments were also made to annuity policies such as surrenders and partial or full withdrawals, while making it clear this would not be permitted before the date of maturity of the policy.
“For policies with a stated retirement age of 50, the retirement age has been increased to 55. The minimum guaranteed interest rates applied to annuity policies have been reduced [and] the period for the application of surrender charges has been extended,” she said.
The chief executive officer also revealed that individuals who bought the investment product – the Executive Flexible Premium Annuity (EFPA) – would be treated separately, with the principal amounts of each of these policies converted to a ten-year annuity at a fixed interest rate.
Repayments will be made according to a set schedule over the same period, Senhouse said, adding that non-individuals such as corporations and charities who purchased the EFPA would also be treated separately.
These will be issued a preference share investment in the parent company, and ongoing management of this group of investors will be handled by the parent firm, she explained.
Senhouse said deposit administration funds also underwent some changes, but trustees would be informed directly.
However, she cautioned that active policies remained in effect subject to continued payment of premiums to ResLife at Worthing, Christ Church from January 23, but could be made at Surepay outlets in the meantime.
“Payments and settlements will only be made to claimants and beneficiaries whose claims have been approved,” she advised.
The ResLife executive also disclosed that payment of cash surrender values to those who gave up their policies would begin in 2022 and would be phased over seven years through to 2028, and that claims for individual and group medical policies would continue to be paid as usual.
“A large portion of claims transferred to ResLife remain open, pending the provision of required information and further adjudication. Beneficiaries who have these initiated claims are encouraged to provide the stipulated information to ResLife to accelerate the adjudication of their claims.
“Once all conditions have been satisfied to facilitate approval, these claims will be paid,” the top executive stated.
Senhouse also gave hope to people whose policies have lapsed, advising that provision had been made to reinstate those policies.
“Provision has been made for Resolution Life to evaluate the quantum of their investment and once we have undertaken the necessary financial analysis, we will make a determination on how best we can move forward with those policyholders in terms of making the potential offer for the reinstatement of those policies,” she said.
Outside of managing the portfolio of former CLICO clients, the ResLife boss said the new company would generate new business that incorporate industry trends to focus on profitable lines and innovation to carve out a distinct place in the market. email@example.com