Some policyholders of Clico (Guyana) who were not up to date with their premium payments may be at risk of losing all the money they would have invested.
A policyholder, who had taken out a 15-year Anticipated Endowment Plan back in 2008, visited the company’s Camp Street Office recently, only to be told he had nothing to get because his policy had lapsed.
The policy had been taken out in January 2008 and was valued at $1.5 million with an annual premium of $125,550. According to the client, he paid two annual premiums which would have renewed his coverage to January 28, 2010.
He said that he had stopped paying his premiums after the “first order of Liquidation, which came sometime in September last year. This order was subsequently challenged by some directors of the company. The order to liquidate the company was finally issued last month by Acting Chief Justice Ian Chang.
The policyholder, this newspaper understands, has since written to the company’s liquidator Lawrence Williams seeking his intervention in the matter. Efforts over the past weeks to reach Williams and the Acting Commissioner of Insurance Tracey Gibson have been unsuccessful.
Other customers have reported difficulties in recouping their investments, one agent who requested anonymity told this newspaper yesterday.
He said though that these persons have since sought clarification from the company on the way forward and are awaiting a response.
Following the collapse of the company last year, President Bharrat Jagdeo repeatedly said that no policyholder or investor would lose his or her money.
Jagdeo during his meeting with Clico (policyholders) at the National Cultural Centre last month had said that the sums to be refunded to customers “would be those as of the time that the judicial management commenced, that is, February 2009.” He said that the government could not pay the interest that would have been accumulated during this period in normal circumstances. It has been noted, that the President’s statement suggests that the company had been considered closed when it came under judicial management. At this meeting the President announced that $3.6 billion had been earmarked to fully repay 11,290 policyholders of the company.
After the company was placed under judicial management last year February, a letter was sent to various categories of policyholders asking them to continue paying their premiums.
Some agents, however, admitted to this newspaper that they had advised their clients not to pay their premiums given the uncertainty regarding the future of the company. Some clients, agents said, had expressed uneasiness about paying their money to a company which had let them down in the first case.
A teacher, who asked to be unnamed, told Stabroek News that two months after the company was placed under judicial management she went to the Ministry of Education asking that they stop making deductions from her salary. She said that the deductions continued for two more months before they were eventually discontinued.
However, many of the institutions who had their employees take out policies with Clico (Guyana) continued to deduct these premiums from salaries from February, until the company was liquidated last month. Others institutions stopped their deductions a few months after the company was placed under judicial management, this newspaper was told.
At the meeting with policyholders, Jagdeo said that: “the long-term insurance portfolio would be separated and hopefully sold to another licensed insurance company in Guyana, thereby ensuring that policies of 6,924 active policyholders under this class of business exit Clico’s books intact and unimpaired.” According to him, “while some insurance companies have already indicated an interest in acquiring this portfolio… expressions of interest will be invited from all licensed insurance services and discussions accelerated to conclude this sale.” Stabroek News understands that there has been talk about the policies being transferred to Demerara Mutual, but there has been no official announcement on this.
Clico (Guyana) invested $6.9 billion (US$34 million) in Clico (Bahamas) which represented 53% of the local company’s assets. Although these investments were liquid on paper, investigations revealed that the money was tied up in real estate investments that Clico (Bahamas) had in Florida through subsidiaries.
When Clico (Bahamas) was ordered liquidated on February 24 last year, the local company was subsequently placed under judicial management. After a review of the company’s affairs, the judicial manager, Maria van Beek, recommended that the company be wound up but the move was subsequently challenged by directors.
