Although holders of a high-yielding annuity from the defunct CLICO insurance company have seen their payments halted, no other policyholders will be affected by the Government’s debt restructuring, the new insurance company managing their portfolios said today.
Policyholders of the Executive Flexible Premium Annuity (EFPA) who were expecting to receive the July 31 installment of their court-ordered ten-year annuity payment were told payments had been suspended. The July tranche would have amounted to $6.5 million.
This was because the Government was unable to guarantee the bonds of New Life Investment Company (NLICO), the parent company of insurer Resolution Life Assurance Company Ltd (ResLife), the policyholders’ spokeswoman June Fowler revealed on Thursday.
In a statement, ResLife responded by stating that no other payments to former CLICO policyholders were affected by the debt restructuring, and that all other aspects of the company’s operations would continue as normal. “Monthly pension payments, the payment of medical claims for individual and group health policies and the settlement of claims on life policies and annuity policies which arose prior to the transfer will continue,” the insurance company said.
“ResLife remains focused on servicing the needs of all policyholders, building confidence in our organization and executing plans for its growth and success,” the release stated.
ResLife confirmed that they were “advised by the Ministry of Finance, Economic Affairs and Investments that the New Life Investment Company Inc. Preservation Bond which is guaranteed by the Government of Barbados and provides the financing for payments to this group of policyholders, was included in the national debt restructuring exercise.
“We empathize with these clients, however, while the national debt restructuring effort continues and this financing to ResLife remains outstanding, we are unable to commence payment to this group of policyholders,” the company said.
Fowler, president of the Barbados Investors and Policyholders Alliance (BIPA), warned the policymakers body might take the suspension to court given the advanced age of many affected policyholders, 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.
“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,” she said.
“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.