The financial meltdown of CLICO (Guyana) has caused a snag in a $200 million insurance policy claim by the family of slain businessman Farouk Kalamadeen, just over a month after the company challenged an attempted to collect on the policy.
Clico had filed court proceedings to bar the Insurance Arbitration Board from arbitrating a complaint by Kalamadeen’s family in January and was granted an interim order by Chief Justice (Ag) Ian Chang that restrained the Board from hearing the case.
Justice Roxanne George-Wiltshire heard the case when it was called yesterday and was informed of Clico’s financial troubles and of the High Court order placing the company under judicial management. As a result, the insurance policy case is expected to be on hold as Clico winding-up hearing continues before the Chief Justice.
On January 26, Clico (Guyana) through its Chief Executive Officer Geeta Singh-Knight filed an ex-parte application in the court seeking a restraining order against the Attorney General, the Commissioner of In-surance and the Insurance Arbitration Board from hearing a complaint filed before the board by Kalamadeen’s family.
Court documents revealed that Jiffy Lubes owner, Mohamed Farouk Kalamadeen had taken out a $200M policy of insurance with Clico payable on his demise. His estate was named beneficiary under the policy and he was also entitled to accidental death benefit of $1.2M at the time of his death.
Kalamadeen’s beheaded body appeared on Cowan Street, Kingston on the morning of April 30, 2008 and almost a month later the family attorney, Bibi Shadick, wrote to Clico informing of his demise and provided a copy of the death certificate.
Shadick was also seeking to have a perfect inventory of the assets of Kalamadeen’s estate and requested that Clico provide her with a full statement of all benefits due to the estate under the policy of insurance to facilitate her application for a grant of letters of administration. But Clico subsequently wrote to Shadick, asking her to note that payment of benefits would be based on formal submission of the requisite claims documents and subject to satisfactory proof of entitlement to receive payments in keeping with the terms and conditions under the policy.
Clico then later wrote to Nariman Kalamadeen, the wife of the deceased, informing her that the estate’s death claim had been denied.
Shadick responded by writing to the Commissioner of Insurance to complain of Clico’s denials of the claim and requested that the matter be referred for arbitration.
The Commissioner of Insurance then wrote to Clico stating that she was in receipt of the compliant and asked for the company to respond.
Clico, through its attorney Roysdale Forde, advised that Section 11 of the Insurance Act of 1998 is ultra vires the provisions of Article 123 of the Constitution of Guyana inasmuch as it seeks to vest judicial and decision making authority in the members of the Insurance Arbitration Board who are not qualified and or authorized by the Constitution to make decisions. Additionally, he claimed the Commissioner of Insurance or her representative is appointed directly by the Minister of Finance in accordance with Section 3 of the Insurance Act and thus there is an incursion of the executive into the judicial sphere.
The company lawyer said also that the authority of the High Court to entertain claims in matters covered by Section 11 (2) (3) of the Insurance Act was removed from the High Court and is now vested in the Insurance Arbitration Board, thus unlawfully ousting the jurisdiction of the High Court, noting that “the determination of disputes in and differences between an insurer and the insured forms part of the jurisdiction of the High Court prior to the enactment of the Insurance Act and therefore subordinate legislation cannot remove or amend the provision of the constitution.”
Further, he said that the Commissioner of Insurance is appointed by the Minister of Finance, who is a member of the executive, and like the two members of the Insurance Arbitration Board do not possess the qualifications of a judge as set out in the Constitution.