The Barbados Investors & Policyholders Alliance (BIPA) today served notice to Government that it was not prepared to wait any longer, and that it intends to seek justice in the law courts on behalf of thousands of out-of-pocket policyholders of CLICO International Life (CIL).
The warning by BIPA that it will be pursuing legal action against the directors and others in CIL came in a press statement this evening in which the Association accused the Government of reneging on its commitment to its members.
“Promises may be a comfort to a fool, but when they come in the form of a series of written undertakings, approved by Cabinet and issued by Government officials at the Ministry of Finance and Economic Affairs which are then reneged upon, that is an extremely serious matter which sends out worrying signals locally and internationally,” said BIPA President June Fowler in the release, in which she made reference to a series of documents dating back to April 3, 2014, which were issued by the Ministry of Finance and Economic Affairs, confirming its approval and commitment, as well as that of Cabinet, to a detailed plan for CIL.
That plan was proposed in December 2013 by the company’s Judicial Manager to restructure the company and preserve the savings, investments and pensions of thousands of traditional and non-traditional policyholders.
Fowler also pointed out that subsequent written commitments were given, including a specific undertaking for funding, which was due to be paid in August 2014, to contribute towards the costs of the first phase of the restructuring plan.
In view of what appeared to be progress, she said BIPA had previously decided to focus on supporting the restructuring plan rather than pursue its civil case against the directors of CIL and others.
However, as the restructuring process seems to have come to a complete halt, BIPA will now resort to its legal action, which will include a requirement for disclosure of the previously sealed Forensic Report, which provides evidence central to its case.
BIPA President June Fowler
“There has been much reference recently to the phrase ‘causing annoyance, distress and anxiety’. Anyone who wants to know what that really feels like, might ask a CIL or BAICO [CLICO’s sister company] policyholder who has saved for their retirement and spent the last six years wondering if they will ever see their money again, whilst Government continues to procrastinate and fails to fulfil their own written undertakings and commitments,” Fowler said.
Against the background of the massive ‘hole’ in CIL’s finances, the BIPA head said her organisation finds it difficult to believe the Government would risk the consequences of a complete collapse of the company, rather than honour its written commitment to inject the necessary funding.
She pointed to the fact that the Judicial Manager had been able to manage CIL’s cash flow sufficiently well over the last four years to meet its obligations to some 17,000 traditional policyholders locally without a single cent of support from the Treasury. But noted that internally generated income through premium payments and the like had now all but run out, as had time.
“Many people do not realise that the company has been paying out monthly pensions on matured traditional and certain other policies ever since, representing millions of dollars which has found their way via policyholders into the local economy,” she said.
However if the written commitment by Government to fund the first phase of restructuring, which was originally scheduled for payment in August 2014, was not made immediately, Fowler stressed that policyholders monthly pension payments would stop.
“Not only will this devastate thousands of pensioners, but it will also dramatically reduce their spending at a time when businesses are already closing down and jobs are being lost due to a reduction in trade,” the president explained.
anestahenry@barbadostoday.bb