THE HIGH COURT has given its seal of approval to the Barbados Investors and Policyholders Alliance (BIPA).
Welcome to BIPA
The next meeting of BIPA will be at 6pm on Wednesday 25th February in the Peninsula Room at the Barbados Hilton Hotel. Although this meeting is for members only, non-members can join BIPA at the meeting on presentation of ID and a policy related letter or copy of their CLICO or BAICO policy and payment of the annual membership fee of $200, which provides group legal representation, up-to-date information & documentation, and strength in numbers.
BIPA urges all existing members of BIPA to come to the meeting, and invites non-member policyholders to join the Alliance at this critical time, not only to keep up with developments, but to ensure their voices are heard moving forward.
For more details call 230 1026.
THE TIME TO UNITE IS NOW!
“Smoke, mirrors and nothing more than a public relations charade!” That is how June Fowler, President of The Barbados Investors and Policyholders Alliance (BIPA) now describes the statement made by Minister of Finance, Chris Sinckler, on 18th December last, in the light of news that hundreds of CLICO pensioners will now have to suck salt fromthis month.
A Representative of the CLICO Judicial Manager, Deloitte advised the BIPA President today that, effective immediately, those traditional policyholders who have been receiving their pensions on a monthly basis will no longer do so as CLICO has run out of cash and payments can no longer continue because the long promised, Cabinet approved injection of funds to sustain the operations of the company and proceed with the proposed re-structuring has not been forthcoming.
“We are so sick of the stream of false promises relating to CLICO dating right back to those made by the late Prime Minister in 2009 and others since, none of which have been fulfilled,” laments Fowler. “It is nothing less than a national disgrace that the nefarious actions of a small number of people can be allowed to continue to destroy the lives of so many in Barbados, some of whom have now died without seeing or knowing what will happen to their lifelong savings.”
The latest blow would appear to confirm that CLICO has indeed run out of funds and, as claimed by the Judicial Manager, it has no option but to put the company into liquidation. And this despite the Minister of Finance’s assertion in his press release last December that “any attempts to place CLICO International Life or its associated companies into liquidation will therefore be premature, unwarranted and unnecessary.” To date, neither the Judicial Manager, nor BIPA have been contacted by the “newly appointed” Directors of the company the Minister of Finance claimed last December had been set up to co-ordinate the execution of the restructuring plan.
The BIPA President hopes that the creation of the company referred to by the Minister is not simply an attempt to further delay a resolution to the entire CLICO fiasco, adding that she wonders if the Minister, and others, realise that this latest development will not only slash the income of hundreds of pensioners, but will also reduce by over $1 million a month the amount of cash being spent by these pensioners which will now be taken out of circulation in the economy, putting a further strain on businesses and threatening jobs.
This is a reminder for members to attend the BIPA SECOND ANNUAL GENERAL MEETING on WEDNESDAY, JUNE 18, 2014 at the Anne Johnson Memorial Auditorium, St. Gabriel’s School, Henry’s Lane, Collymore Rock, St. Michael from 6.00 – 8.00 p.m.
- Ascertainment of Quorum in accordance with Organization’s By-laws
- Welcome Remarks and Introductions
- Confirmation of Proxies
- Confirmation of Minutes of first annual general meeting held June 6, 2013
- Matters Arising from the Minutes
- Presentation of Reports:
- Public Relations Committee
- Auditor’s Report and Presentation of audited financial statements for the year ended March 31, 2014
- Appointment of auditors for the year ending March 31, 2015
- Appointment of Directors and Officers according to By-laws
- Any other business
- Adjournment of business meeting
PEOPLE HOLDING CLICO and British American Insurance Company (BAICO) policies are gearing up for a round of court hearings that could signal the end of a five year fight for compensation.
Last Wednesday the Barbados Investors and Policyholders Alliance (BIPA) selected separate committees to continue the work on the two cases, amidst reports that a judge had been assigned to the case and policyholders could be days away from the start of the court process.
Each committee consists of about five policyholders and reflects the variety of investments – including life insurance, pensions and Executive Flexible Premium Annuity (EFPA) policies – in the two businesses, whose problems worsened in 2009 when parent company CL Financial started its meltdown.
Selection of the committees was finalised at a BIPA meeting held in the Ann Johnson Auditorium at St Gabriel’s School, with BIPA president June Fowler saying that once the agency and its committees were accepted by the court as part of the judicial process to resolve the CLICO/BAICO problems, BIPA would be the only representative for all the policyholders, whether members of the alliance or not.
“Any decisions that are made by us will affect everybody else,” she told the gathering.
BIPA officials are of the view that at this point both the CLICO judicial manager and any judge assigned to the case would want to open the door for them, the argument being that a judge would want to know that the policyholders were properly represented and when he was making an order he had some comfort that the policyholders had had their input.
BIPA officials anticipate a series of court hearings that would address competing claims for compensation – including those from corporate and other investors.
The BIPA meeting came Cabinet’s formal approval of the terms and conditions associated with the restructuring of the local operations of CLICO International Life Insurance Ltd (CIL).
Information coming out of the meeting indicated that the CLICO case might be closer than the BAICO matter to settlement.
However, BIPA is seeking clarity on a number of issues, including interest rates in relation to annuities and details about NEWCO, a new insurance company to take over the CLICO insurance business, as well as about separate entities which will own the real estate and other illiquid CLICO assets.
BIPA is also expected to look at finding “mechanisms for early cash”, to ease people urgently needing substantial sums and the elderly who do not want to wait long periods for their investments to mature.
The BIPA meeting was addressed by Alair Shepherd QC and Peter Douglas, advisors to the alliance. (TY)
Weekend Nation Friday June 6th 2014
THE WAY NOW SEEMS to be clear for a restructuring plan for CLICO International Life Insurance Limited (CIL) to be put in place.
This follows Cabinet’s approval of the judicial manager’s recommendations.
This formal approval enables the judicial manager, Deloitte Consulting Ltd, to start the process of implementing the final recommendations contained in the report and addendum presented to the High Court last June, with the aim of having a regional solution to the long-running situation.
It will see, among other things, the creation of a new insurance company (NEWCO) to take over the insurance business by yearend, along with the creation of separate entities which will own the real estate and other illiquid assets. These property holding entities will issue bonds to the new insurance company which will be guaranteed by Government.
This development has however been cautiously greeted by the Barbados Investors & Policyholders Alliance Inc (BIPA), which represents the thousands of Barbadians with money tied up in CLICO and its sister company British American Insurance Company (Barbados) Limited since their collapse in 2009.
Last night, BIPA chairperson, June Fowler, said they were relieved that progress has been made, “even though the only thing that has changed since June last year is that we now have Cabinet’s approval and a timeline has been given.
“The devil is always in the detail so we now have to sit down with our team of advisors to further examine the other things outlined in the Press release,” added Fowler.
In the release yesterday, Deloitte stated that in the absence of specific responses from within the Eastern Caribbean to the proposal, they initiated discussions last November for the process to be started here. These discussions resulted in the Cabinet giving approval for the regional solution to be started in Barbados as the first step towards the overall restructuring of CIL.
The intentions of those recommendations were that firstly, all policyholders with traditional insurance policies (life, health and pension plans) would receive the full value of their policies with the support of the Government.
Secondly, all holders of individual Executive Flexible Premium Annuity (EFPA) policies would receive the value of their principal investment. These types of policies would be converted into annuity products payable over a period of up to ten years. And third, holders of EFPA policies, other than individuals, would receive shares in the property holding entities.
Deloitte noted that work was under way to achieve these goals. It stated that the key elements of this approach includes:
- Government being the guarantor of the bonds issued by the property company to NEWCO;
- Government issuing a demand note for the amount of any Statutory Fund shortfall;
- The demand note shall pay interest to NEWCO at a rate sufficient to fund the expected monthly shortfall from NEWCO’s operations, including the monthly payments on the restructured individual EFPA obligations;
- Individual EFPA policyholders shall have their principal claims converted to ten-year fixed annuities. The Government shall guarantee the monthly blended payments of interest and principal due on the restructured ten-year fixed annuity contracts if the operating cash flow of NEWCO is insufficient; and
- The Government or its assignee shall be the owner of the common shares of NEWCO.
The release stated that throughout this restructuring, the participation of the Ministry of Finance and Economic Affairs, the Central Bank of Barbados and the Financial Services Commission as part of the CIL Advisory Committee would be essential to the successful financing and implementation of this agreed approach in the interest of policyholders.
After CLICO and BAICO collapsed in 2009, a judicial manager was appointed on February 4, 2011. The total value of the policyholder liabilities to be transferred to the new company was put at $542 million, consisting of $275 million of liabilities from Barbados and $275 million from the Eastern Caribbean Currency Union. (SP)
Daily Nation Thursday May 15th
The Barbados Investors and Policyholders Alliance (BIPA) has welcomed the news that the Cabinet of the Government of Barbados has finally approved the proposals for the restructuring of the operations of CLICO International Life (CIL) contained in the Report and Addendum presented to the Barbados High Court in June 2013. The Alliance is also pleased that a projected timeline for completion of the plan has now been stated.
However, BIPA has requested a meeting with the CLICO Judicial Manager in order to go through, in detail, a number of elements of the plan, including the projected process and timing of the approval of the Court; the setting up of ‘NEWCO’, its ownership and management; and the latest position on the interest expressed by the Canadian group, and any other parties, in taking over the operations of CIL. The Alliance will also be asking for more detailed information on the Special Purpose Vehicle (SPV) to deal with CLICO’s real estate.
BIPA President June Fowler is particularly concerned that clarity is reached regarding the treatment of the EFPA policyholders. “We need a clear interpretation of the meaning of ‘principal’ insofar as it relates to individual EFPAs, as well as specific details on the nature of the annuities being offered to the EFPA policyholders, including the proposed interest rate, term and early cash-out options, especially for older policyholders,” says Fowler.
While frustrated at the length of time it has taken to get to this stage, the BIPA President feels there is now real light at the end of the tunnel. “Policyholders have suffered so many delays and setbacks,” she says, “that I hope all parties will co-operate to ensure that the process from this point forward is unhindered and finally leads to a satisfactory conclusion by year end.”
CABINET APPROVES PAYOUT PLAN FOR POLICYHOLDERS
by Emmanuel Joseph
The way is now clear for thousands of policyholders and investors of CLICO International Life Insurance to start getting compensation, five years after the company’s financial collapse.
Deloitte Consulting Ltd tonight announced it had received confirmation that Cabinet had approved the terms, conditions and actions to be taken, as set out in the restructuring of CLICO’s operations.
In response, the Barbados Investors And Policyholders Alliance (BIPA) said it was “relieved” but still cautious until all the details were revealed. “The devil is in the details,” BIPA chairperson June Fowler told Barbados TODAY.
According to Deloitte, the formal approval enables the judicial manager to start the process of implementing the final recommendations contained in the report and addendum presented to the Barbados High Court in June 2013, with the aim of having a regional solution,” Deloitte stated, noting that the Barbados solution would be the first step of the overall restructuring of CLICO.
Under those recommendations all policyholders with traditional insurance policies, such as life, health and pension plans, will receive the full value of their policies with the support of the Government.
“All holders of individual Executive Premium Annuity (EFPA) policies will receive the value of their principal investment. These types of policies will be converted into annuity products payable over a period of up to ten years,” it said.
The plan envisages the creation of a new insurance company (NEWCO) – by the end of this year – to take over the insurance business and the creation of separate entities that will own the real estate and other illiquid assets.
These property-holding entities will issue bonds to the new insurance company, which will be guaranteed by the Barbados Government.
Holders of EFPA policies, other than individuals, will receive shares in the property holding entities.
Key elements of the agreed approach include Government being guarantor of the bonds issued by the property company to NEWCO; Government issuing a demand note for the amount of any statutory fund shortfall. The Government or its assignee will also own the common shares of NEWCO.
Deloitte said the demand note would also pay interest to NEWCO at a good enough rate to fund the expected monthly shortfall from the new company’s operations, including the monthly payments on the restructured individual EFPA obligations.
The judicial manager noted that throughout the restructuring, the participation of the ministry of finance and economic affairs, the Central Bank of Barbados and the Financial Services Commission as part of the CIL Advisory Committee, will be essential to the successful financing and implementation of this agreed approach in the interest of policyholders.
BarbadosToday: Wednesday May 14th 2014