More pressure is being brought to bear on the Government and the Central Bank concerning Clico/CL Financial.
Following CL Financial’s majority shareholder Lawrence Duprey’s threat of legal action against the Government to try to regain control of his company, the United Policyholders Group (UPG) is now threatening similar action if it does not get answers on certain issues affecting those policyholders.
The UPG, comprising persons who had held policies with Clico, yesterday issued a statement saying it was unhappy with the manner in which the Central Bank and Government have been treating with affected policyholders.
The UPG stated it wrote to the Central Bank Governor and the Inspector of Financial Institutions early last week.
“We feel that the questions and matters raised on behalf of policyholders are a matter of public interest and should be publicly answered. Should there not be a timely response, we have considered our options, including judicial review.
“We also call on ATTIC and its executive to break its silence on the treatment of Clico and British American policyholders by the Central Bank and the GORTT over the last seven years and to raise their collective voice towards the protection of all policyholders, since the purpose of the Insurance Act is to protect policyholders above all others in the event of the company’s failure and it would apply to all the companies represented in ATTIC.”
UPG’s move came after the disclosure that former CL Financial executive chairman Lawrence Duprey and a new group called the Clico Stakeholders’ Alliance, which involves Ramesh Lawrence Maharaj SC, were formulating legal action to block any planned Government sale of CL Financial assets.
In his mid-year budget review on April 8, Finance Minister Colm Imbert signaled the disposal of certain Clico assets to recoup the $20 billion used for the group’s bailout in 2009. But Imbert said these proposals only relate to Clico and in “due course” he would report on plans to monetise other assets held directly by the group.
Duprey’s moves follow a failed bid to elicit feedback from Government to discuss a plan he has to recover his former companies and repay the outstanding debt owed to Government from the bailout. He sent the plans to the Central Bank and Government in March. Imbert said yesterday he has not yet decided to meet with Duprey’s representatives.
In the latest development, the UPG cited a letter that the group sent to the Central Bank copied to Imbert, citing several outstanding matters raised with the Bank over the last year.
UPG contended that despite the acknowledgment by the Central Bank and Clico that there are sufficient assets to pay out all policyholders and a “plan” outlined for the payment of funds held in policies by Clico and initial payments being made as Phase I, there has been no timeline offered, not even tentatively, as to when the further phases can be expected to commence.
“It had been our understanding that the second and third phases of payments would have started by the end of the third quarter of 2015. However, not only has this not happened, but there has been no update whatsoever from the Central Bank as to when it will happen. Having declared that the statutory fund of Clico is no longer in deficit, the Central Bank and Clico have a legal obligation to act in policyholders’ interests and pay out policies without undue delay.
“In light of the above, we demand that the Central Bank publicly and immediately release the current value of cash and cash equivalents held by Clico. While these funds continue to be held by Clico at the Central Bank’s behest, the policyholders to whom these funds rightfully belong are being forced to manage without the benefit of their own property, without even the courtesy of a timely update on the situation.
The letter signed by Angeli Gajadar cited other issues including the “arbitrary basis on which the Central Bank has determined the residency status of policyholders for the purpose of upholding or denying their right of statutory fund protection.”
“This has resulted in several policyholders, who were legal residents of T&T when the policy was purchased, being “deemed” non-resident policyholders by the Central Bank.
The letter added: “It had been our understanding that the separation of resident and non-resident policyholders with regard to their policies’ status within the statutory fund should only arise on the winding up of the insurance company.”