Two months after the announced winding up of Resolution Life Assurance Company Limited (ResLife), the court-sanctioned successor of CLICO, policyholders finally got details yesterday about their promised payments.
In Parliament Prime Minister Mia Mottley announced that policyholders and claimants are to benefit from a settlement package of $103 million in cash payouts and $300 million in bonds. This will see eligible policyholders or claimants due less than $20,000, receiving cash, and the balance in 15-year bonds.
However, it was last night at a Resolution Life town hall meeting at the Lloyd Erskine Sandiford Centre that policyholders were informed for the first time that payments will commence next month, and that the process is expected to be completed by August. During the meeting, which barely had standing room, policyholders and claimants were also apprised of the eligibility rules.
According to Chief Executive Officer Cheryl Senhouse, even though the Prime Minister would have outlined general policy for payouts, the actual tabulations were not as simple.
“Insurance is fairly complicated and certainly as a company we would have inherited a wide range of policies, so while the Ministry [of Finance] would have outlined a fairly high-level policy for the liquidation, we had to look at the details of the policies that we had on hand to determine which ones would be eligible for settlement,” said Senhouse.
She revealed that among the persons eligible were those holding active policies as of March 31, 2019 that had a positive net cash or fund values. Claims that remain unpaid up to March 31, as well as surrendered cash value claims that were unpaid for the same period, are also eligible to benefit. Pensions and Flexible Premium Annuities are also on the list to be paid. Additionally, it was revealed that persons with two or more policies that cumulatively amount to more than $20,000, will still only receive one cash payment of $20,000 and the balance in bonds.
However, policies that do not generate a cash value would not be part of the settlement process. Among these would be, term life policies, critical illness policies, individual health policies or group policies and lapsed policies. It was also revealed that the company was in the process of selecting bidders to give some of these policyholders the option of switching.
“So, in terms of actual active policies, we used a criterion where if the policy was active as of March 31, 2019 and had a net positive cash value or positive fund value. This is important because some policyholders would have stopped paying their policies and simply allowed them to lapse. So, the premium payments would have gone against the fund value and at some point, the policy value would have gone to zero. Those types of policies are not eligible,” she explained.
Senhouse further pointed out “There were also a number of claims that would have come over to us, so where there were deaths or maturity on policies that were unpaid, those policies would also be included. There were also surrenders that occurred prior to the period of judicial management and during that period, we would also be looking at those policies as well. Regarding Executive Flexible Premium Annuities, some of those persons already brought in these policies for new Res Life contracts and those policies would also be eligible.”
During the meeting, which lasted close to three hours, persons sought clarity on any “grey” areas. Among the areas of concern raised, persons wanted clarity on what were the entitlements to the holders of the series ‘B’ bonds.
In response, those in attendance were told that during the first four years, Government will pay the interest on these bonds. After the first four years, holders of these instruments will receive quarterly payments on the principal. It was made clear that bond-holders were under no obligation to hold these bonds for the full 15 years as Government was creating platforms by which persons can trade or sell them.