Long-awaited payments for some former CLICO policyholders have become a casualty of Government’s debt restructuring efforts.
Just when policyholders of the collapsed insurance giant dared to hope that the ten-year struggle to get back their investment was over, holders of Executive Flexible Premium Annuity (EFPA) instruments have been told their annuity payments have been put on hold indefinitely, according to the policyholders’ association.
The state-established Resolution Life Assurance Company Limited (Res Life) is now managing the original high-yield annuity.
Policyholders who were expecting to receive the July 31 installment of their court-order ten-year annuity payment, were told that the Government was unable guarantee the bonds of Res Life’s parent company, New Life Investment Company (NLICO), president of the Barbados Investors and Policyholders Alliance (BIPA) June Fowler, told Barbados TODAY.
“A new administration has come into office and the NLICO bond that is guaranteed by Government has been caught up in the Government’s restructuring process and because of this the EFPA policyholders have not been paid as promised at July 31. We do not know when they would get their payments,” said Fowler, who revealed the July tranche would have amounted to $6.5 million.
And the organization would “more than likely” take the suspension to court as she expressed concern that the age of many affected policyholders made further delays an untenable prospect, Fowler said, while expressing sympathy for the country’s economic crisis.
“BIPA has to get involved because we have some elderly members. We have a member that is 96 years old and you have already converted his EFPA to a ten-year annuity and now there is uncertainty as to when that member will get is money. A lot of the members are over 80 years old. So BIPA is not being unreasonable but we are saying extract $6.5 million and make the first payment to the EFPA policyholders. We don’t want to go to court [but] it seems as though we would be left with no choice,” said Fowler.
The BIPA head reached out to Minister in the Ministry of Finance, Ryan Straughn, who she said noted the concerns but has not followed up with any action, she told Barbados TODAY.
Already angered by the manner in which EFPA policyholders were being treated, Fowler also said that she was fearful that Res Life pensions could be next on chopping block.
“We are not very happy with the way EFPA policyholders are being treated but we are also hoping that there is not a trickle-down effect on pensioners who are getting their monthly pension payments right now. So we are watching this very closely,” Fowler said.
Barbados TODAY contacted the management of Res Life but was told that the company would issue a statement tomorrow.
Just two weeks after commencing operations last April, Res Life announced that had already paid out almost $1 million to CLICO policyholders.
The company began payments on annuities amounting to about $400, 000 per month. Most payments were paid to holders of pension plans.
Res Life Chief Executive Officer Cheryl Senhouse told journalists last March the new company would ensure that current payments to those policyholders remained “on track, and that the backlog amounts owed to these persons is settled within the six-month time frame that we originally outlined.”