Former attorney general Ramesh Lawrence Maharaj has accused the coalition People’s Partnership government of seeking to “enslave” policyholders even as the High Court is being asked to enforce their right to full compensation on the Executive Annual Premium Policy issued by the struggling Colonial Life Insurance Company (CLICO).
Maharaj, speaking after a meeting of the CLICO united policyholders group, accused Finance Minister Winston Dookeran of engineering the government’s plan to enslave policyholders.
“The government is using the money of the policyholders and telling them they are not giving the value of CLICO and CL Financial.
“They cannot see the financial report and the government will take away right of policyholders through Parliament for them to file action against CLICO. There is no difference to that and slavery,” said Maharaj, who is also representing the aggrieved policyholders.
Repayment plan
Last year, the government announced a plan to repay policyholders their principal balances over a period of 20 years without interest in the form of zero coupon bonds.
Last week, the government said it had approved the creation of a CLICO investment trust that is likely to meet all outstanding payments to policyholders of the troubled insurance giant within the next four months.
Dookeran told reporters that Cabinet had approved the Trust and for payments to policyholders with investments of TT$75,000 (US$12,500) and over being completed by February 29.
“Cabinet took the decision to approve the establishment of a CLICO investment trust,” he said, adding that the 51.9 million shares of Republic Bank, which are “now in the hands of CLICO, will be transferred to the trust.
“This represents, at today’s market value, a transfer of approximately TT$4.8 billion (US$800 million). Those policyholders, who will be issued bonds of 11 to 20-year duration, will now have access to this trust to purchase units equivalent to the value of their deposit during that period of 11 to 20 years,” he explained.
“We anticipate that the total value of such obligations is in the order of TT$5.2 billion (US$800.6 million) and if they were all to take up this offer, the government will still have to add a further TT$400 million (US$66.6 million) to the trust in order to have it fully capitalised to do this transaction,” Dookeran said.
Withholding information
But Maharaj said that Dookeran’s plan “will only give the policyholders 42 cents (US$0.07) in the dollar when he is saying that their plan will give them 92 cents (US$0.34) in the dollar.
“They have refused to give us information that their plan will support 92 cents … . We have written them letters and they have refused to give us information,” he added.
Meanwhile, British Queen’s Counsel Peter Knox is due to represent the policyholders in the High Court on Wednesday after the members filed a claim against the government asking the court to enforce their right to full compensation on the Executive Annual Premium Policy.
The policyholders are also requesting that the court grant an interim order against the Cabinet ordering it to supply the audited accounts of CLICO and its parent company CL Financial, so that the more than 200,000 policyholders of CLICO as well as taxpayers can see the value of the assets of the insurance company.
The policyholders are contending that the government is acting unlawfully in treating them unequally in the whole issue.
CMC
