BIPA welcomes CLICO resolution, ‘seeks details’

Although welcoming Government’s decision to pay out the vast majority of CLICO claims and investments, the group that champions the cause of policyholders and investors of the collapsed CLICO Life Insurance Company, is wondering how the payoff is going to work.

The Barbados Investors and Policyholders Alliance (BIPA) has said there is need for clarity from the Ministry of Finance, a day after Prime Minister and Minister of Finance Mia Mottley announced the decision during the Budget speech  to the House of Assembly.

BIPA chairman June Fowler told Barbados TODAY: “Our main concern at this stage is to get clarification of the exact derails and how each and every class of policyholder will be treated.  Also, given the advanced age of many policyholders, we will be hoping that provision will be made to enable transfer or trade the 15 year bonds.”

The Prime Minister outline a payment plan for 8,944 policyholders.  An additional 1,394 policyholders or 12 per cent of the company’s portfolio are to receive at least half of their claims and holdings in cash.

While acknowledging that Government would be unable to repay all policyholders the entire amounts owed to them, the Prime Minister said an effort was being made to ensure that these individuals received at least some of their money.

But while welcoming the announcement, the BIPA chair took a swipe at the court-appointed Judicial Manager for CLICO.

Fowler said: “BIPA’s first response is that the Judicial Manager has turned out to be the winner in this debacle, having been charging substantial fees since 2011,”

That aside, BIPA is relieved that this “desperately sad affair” was finally coming to an end, she added.

The Prime Minister also announced that the holders of the controversial high-yield, high-risk EFPA would be paid back their principal in special 15-year bonds, but only at the interest rate of 0.25 per cent over the 15 year period.   

Althought disappointed with the huge haircut planned for EFPA holders, Fowler said: “The fact that EFPA policyholders will, as promised by the previous administration, receive their principal in full, albeit over 15, as opposed to the originally planned ten years, is of some comfort. Their loss of interest however is another matter altogether.”

The CLICO policyholders’ spokesperson added that BIPA would seek an urgent meeting with Minister in the Ministry of Finance Ryan Straughn in advance of upcoming town hall meetings to ensure BIPA fully understands the details of what has been outlined by the Prime Minister.

Mottley had also revealed that two weeks ago, Cabinet approved the winding up of Resolution Life (ResLife), the court-sanctioned successor of CLICO. But Fowler said she was not surprised at this.

She told Barbados TODAY: “BIPA was not surprised about the decision to wind up ResLife as we were also concerned that no effort had been made to start selling insurance and investment products. The way things have turned out, that was a blessing in disguise for potential policyholders.”