Clico Policyholders: Pay Us 40% Upfront

By Lara Pickford-Gordon
October 25 2010 –

CLICO BailoutClico policyholders want 40 percent of their investment in the Colonial Life Insurance Company Ltd “up front” and the balance paid off in government bonds. Persons who wish to liquidate their bonds should be free to do so and there will be no “middle man.”

This proposal has been put to the Government and was yesterday endorsed by scores of policyholders attending a meeting at Woodford Square, Port-of-Spain to get an update on negotiations between their representatives and the government inter-ministerial team headed by Agriculture Minister Vasant Bharath.

Five meetings have taken place between October 11 and 18. Peter Permell, of the Clico Policyholders Group, said the team has asked for the bonds to be amortised, “which means in this particular instance we have asked for it to be paid on a quarterly basis over the next five to seven years between four to 4.5 percent interest on this money.”

He said 50 percent of the balance should be paid in five-year bonds at a rate of four percent, and 50 percent in seven-year bonds at a rate of 4.5 percent. Persons who want to sell their bonds for cash will be able to do so. Permell said by paying quarterly, persons could get access to cash in times of emergencies. Bonds must be redeemable by the Government at full face value, and transferable. According to the proposal Clico Investment Bank, the Government and private corporations whose principles and balances exceed $75,000 will get “bullet payment” from a zero coupon seven-year bond. “The State could wait, corporations could wait. We cannot wait.”

Permell said there should be a specific cut off date for determining the liabilities to policyholders. The last interest payment was for August and this was adding to the liabilities. The policyholders are asking that while the liabilities are being quantified and a plan implemented for Clico, for the interim an interest rate of five percent “market rate” should be implemented. Permell said the onus will be on Government to implement the plan as soon as possible.

Policyholders also want a stake in the sale of any Clico assets sold above their book value.

Permell said, “Those bonds will have an equity participation by the issue of warrants. The warrants will give bondholders the right to participate in the upside or any gains in any sale of all assets.” Any profits will be divided 49 percent to Government and 51 percent to policyholders.

The warrants could be traded on the secondary market. Permell said there should be a policyholders’ representative on the boards of CL Financial and Clico to look out for their interests and ensure assets are not sold below market value. Another proposal which was discussed at the forum is from Ryan Asset Liability Management (RALM), which was invited by the policyholders to give input, to invest US$600 million from Government and convert it to US treasury bills which will be managed over 20 years so at the end its value will be equal to the debt. Policyholders’ representative Prem Beharry said RALM said within three months of engagement it could sell bonds and get US$1.8 billion which could be used to pay all policyholders but the country will have to carry a debt. Beharry said the proposal could only work where interest rates in the US are on the rise.

Permell said the proposal from Finance Minister Winston Dookeran of payment over 20 years at zero percent interest has been rejected outright by policyholders and is off the table. The policyholders are calling for Government to honour the Memorandum of Understanding (MOU) from the PNM administration which guaranteed investments of policyholders. Permell said anxiety is growing and investors wanted to hear “very quickly” from Government. “The ball is now in the court of the Government,” he said.

During the open forum tears, anger and frustration came from policyholders. Peter Hinds, of Tarouba, was overcome with emotion when he spoke of investing for his two daughters’ future. He demanded that policyholders get their money “right now”. Hinds told the gathering he had not voted for the People’s Partnership and was not sorry. Phillip Lyder said he supported the Congress of the People but now wanted to have nothing to do with the party. He warned that the handling of the Clico policyholders will determine if the Partnership is ever re-elected. “I would have died for them. As far as I am concerned, Dookeran could drop…,” Lyder said without saying anything more. The father of attorney Lynette Seebaran- Suite, former Permanent Secretary in the Ministry of National Security Leo Seebaran, said his investment had matured last December and based on the Government’s commitment he reinvested several thousands. The 85-year-old told Newsday he was very disturbed and disappointed since he heard the Central Bank Governor give assurances. “The Government has no right to renege in the change from one government to another. It does not say much for Government. Government must honour its obligation.”,129705.html

Govt gets a week to decide on proposals
The Government has one week to decide on the proposals presented last week by the Clico Policyholders Group (CPG) to resolve the issue concerning Clico investors.

40% Now
Members of the CLICO Policyholders Group want Government to pay them an immediate 40 per cent on their deposits, with a promise to pay the balance quarterly over a five- to seven-year period at four to four and a half per cent interest.

Govt looking at new proposals
The PP administration will not allow former UNC MP Ramesh Lawrence Maharaj to set its agenda regarding the Clico issue, PP press secretary Garvin Nicholas said yesterday.

Agent: Sick and elderly suffering

Dookeran takes a bashing

Dooks will ‘bring down Partnership’

6 thoughts on “Clico Policyholders: Pay Us 40% Upfront”

  1. PM: Govt to consider 40% CLICO plan
    The proposal by members of the CLICO Policyholders Group to be paid 40 per cent of their deposit immediately and the balance quarterly over a five-to-seven-year period at four to four-and-a half-per cent interest, will be considered, along with several other proposals, Prime Minister Kamla Persad-Bissessar said yesterday.

    Clico — other troubling questions
    In light of the condemnatory strictures of the Supervisor of Insurance in its 1997 Report on the operation of Clico detailed in my previous article, I inquired whether any offence was committed according to the provisions of the Insurance Act of 1980.

    Information shortage on CLICO issue
    …the demonisation of the Finance Minister seems hardly calculated to preserve such public sympathy as the group has enjoyed. No government anywhere can, or should, be bullied into submission, especially with regard to the allocation of public funds it was elected to manage. The “or-else!” tenor of the demands being made, ultimately on the public purse, represent at least a curious strategy.

    Towards a fair and equitable Clico decision
    The Government, through its spokesman, Garvin Nicholas, is right when it says that it will not be rushed into making a snap decision on the politically and financially sensitive issues surrounding the bailout of some 25,000 holders of short-term investment products issued the Colonial Life Insurance Company (Clico).

    Vasant: It’s up to the PM
    FOOD Production Minister Vasant Bharath said it is up to the Prime Minister and Cabinet to decide on the next move regarding proposals forwarded by the Clico policyholders’ group.

  2. I am sorry, but the policyholders cannot demand their money ‘right now’. They cannot even demand their money – it does not exist. The government could only buy Clico’s ‘holdings’, and manage those holdings as they see fit.
    If the unfortunate policyholders can back their money, well then why can’t I sue the government for the money that I lost in fallen stock prices after their volume limits that they placed on the local stock exchange? Why can’t I get back my money in all the share prices that have fallen?
    Easy – because it is inequitable for the taxpayers to be giving their funds to private entities, no matter how sad the circumstance. Why don’t the policyholders put their money towards building schools? Easy, cuz the two entities are seperate.
    The equitable and fair solution to this situation is as unpalatable as it is necessary.

    1. This comments just shows your clear ignorance. Where do you think the money came from to purchase clico’s assets? These assets that the government is laying claim to were bought with the money of CLICO’s policyholders. These are their assets.

  3. The Manning government’s irresponsible election promise to fully fund Clico’s misadventures, gave the Clico investors false hope. The government of the day did not fully evaluate the sorry implications of Clico fiasco. How could they? Their finance minister, supported by the governor of the central bank, bailed out; she withdrew all her funds. The Governor himself withdrew his personal investment. Other PNM insiders with connections withdrew their funds. And guess what? They are all enjoying their dollars. No charges. No investigation.Welcome to T&T; the land of the balisier.
    Now these sorry investors are blaming Dookeran for coming up with a plan to save their sorry asses. In all jurisdictions where failures of this type occurs, the shareholders and investors are hanged out to dry…no rescue plan, no pay out. The forces of the market takes over and it’s too bad if you are in a losing position.But, it’s T&T, they expect to be rescued… to be compensated for their stupidity. The warning signals were sounded as far back as 1994. But they were taken in by the promise of 8, 9, 10 %.Greed took over! Is it not amazing that people so foolishly dropped their hard earned cash on a Ponzi scheme because they trusted an old so-called established company,led by a “prominent” French Creole. These are not my words. These are the words of many investors with whom I spoke. And what is even more fascinating is that these same Clico investors were dead set against any rescue plan for the HCU. At the time they thought that Clico was solid and safe!

  4. Yes clico policyholders can demand their money. Where do you think the money came from to purchase clico’s assets? These are the policyholders’ assets that the government is laying claim to.

    Please read the facts before you decide to air your mouth

  5. did mr de lima receive a brief since lawyers normally do not act pro-bono
    couild he solicit state board appts for selling his soul that he walked away
    probably that was his payment

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