The Colonial Life Insurance Company (Clico) was being used as a cash cow by government, former attorney general Ramesh Lawrence said yesterday as he lost a case in the Privy Council filed on behalf of the United Policyholders Group.
The judgment, which was handed down by law lords, dismissed the appeal and upheld the ruling of the Court of Appeal that government had no money to pay 1,500 policyholders who are owed in excess of $1 billion.
Speaking at a press conference at his San Fernando law chambers, Maharaj said: “I do not respectfully agree with the judgment given by the courts. The learned Judges have determined the issues of law and facts in the case as they see it but I say with the greatest respect to the courts, these are heart breaking facts and the judgment is a heart breaking judgment.”
Maharaj said many of the policyholders were pensioners, retirees and widows who invested all their savings on policies of insurance, hoping to have money to live over the years.
Saying some of the policyholders died from heart attacks and suffered because they could not pay medical bills, Maharaj noted: “The damage was irreparable. Many of them were not able to pay for their medicine and many of them lost their homes.”
Even though they are no longer entitled to interest on their capital savings, Maharaj said there was $24.5 billion in Clico’s Statutory Fund that could be used to pay the policyholders.
Saying the sale of Clico’s assets should have benefitted the policyholders, Maharaj explained:
“It appears as if Clico was used as a cash cow for government to do its work as a government. The monies that was obtained from the sale of assets of Clico should have been used as a first priority to pay the policyholders.”
He added that the Central Bank has already indicated there was enough in the Clico Fund to pay the policyholders.
“Reports also show that the total assets of Clico in 2012 was valued at $22.4 billion and in 2013, the total assets was valued at $28.52 billion and in 2014 the total assets was valued at $29.32 billion,” Maharaj noted.
He also said if there was a financial meltdown following the decision by Britain to leave the European Union, then people would be unwilling to trust the government.
“Having regard to the fallout of Brexit, if a financial crisis arises in England, T&T or anywhere in the Commonwealth, the government would have to depend upon the people to trust its word and not to move their monies from the banks, insurances and financial institutions,” Maharaj said.
He also called for policyholders to be paid the remaining 15 per cent of their monies by the Central Bank.
“I have a deep-seated passion to continue the battle to ensure that the Central Bank pays to these policyholders who did not assent to take government’s offer to accept a 30 per cent reduction in the value of their policies. The Statutory Fund has the monies to pay them,” he said.
He noted that a private meeting would be held at Gaston Court, Chaguanas, on Sunday to discuss the impact of the Privy Council ruling on policyholders.
Flashback
In 2014, the Court of Appeal reversed a High Court ruling that policyholders were entitled to be paid the full sum due under their policies of insurance with the accrued interest.
The High Court had found that the then Patrick Manning government in 2009 had made a clear promise to guarantee payment of the sums but the Court of Appeal subsequently ruled that no such clear promise was made.
It ruled there was no legitimate expectation of a benefit and that the government was not liable as the issues involved macro-economic matters which were not an issue for the courts. This ruling was upheld by the Privy Council.