The CLICO Policyholders Group (CPG) says it is encouraged by the ruling of the Trinidad high court last week that ordered the financially troubled Colonial Life Insurance Company (CLICO) to repay about TT$60 million (US$10 million) to six policy holders.
"It is nothing short of a major victory and a game-changer for all EFPA policyholders since it is likely to have a significant impact going forward for the thousands of other EFPA policyholders who are also seeking payment of their hard-earned money," said the group's chairman, Peter Permell.
He said the ruling also represented a clear vindication of the stance taken by his group from the beginning.
"In fact, the records will show that, to date, the CPG's position has been consistent throughout this matter. We have always maintained that the finance minister (Winston Dookeran) was morally and legally wrong to stop all payments to the policyholders on September 8, 2010 in breach of our policies."
But media reports on Monday quoted Finance Minister Winston Dookeran as saying that CLICO would appeal.
Dookeran said the ruling does not impact the government's plan to pay each Executive Flexible Premium Annuity (EFPA) policyholder up to TT$75,000 (US$12,500), while others owed more than that amount would receive a 20-year-bond at zero per cent interest.
"The court hasn't stopped us. We are continuing with a plan until the court stops us," he told the Trinidad Guardian newspaper.
In a 51-page ruling on Friday, Justice Maureen Rajnauth-Lee ordered that in addition to the TT$58.7 million (US$9.7 million) to be paid to six CLICO EFPA policyholders, the company must also meet legal costs estimated at more than one million (US$166,660).
But the court has also granted a 42-day stay on the ruling to allow for CLICO to appeal.
The St Christopher and St Nevis Security Services was among those named in the lawsuit against CLICO. The others are attorneys Alvin Fitzpatrick, SC, and Lesley-ann Lucky-Samaroo.
The six had sued for the return of money which they invested in CLICO.
The policyholders in their suit claimed the policies were merely contracts in the nature of deposits and not EFPA investments, and became due some time ago. They said they wanted to utilise their policies as investment/savings mechanisms.
In the claims, the policyholders signed an annuity application form and paid money in the claims as deposits/contributions. CLICO then issued certificates for the EFPA agreements.
But CLICO argued that the policies were for an annuity, and the annuity became due at the retirement age stipulated in the policy.
The insurance company, whose financial problems have sent shockwaves across the Caribbean, also argued that by asking for their money, the EFPA policyholders surrendered their policies of insurance before the stipulated retirement ages.
Permell said, essentially, the ruling means that even though the central bank intervened in the affairs of CLICO under Section 44D of the Central Bank Act, the insurance company remains a going concern and, as such, still has to honour contractual obligations to its policyholders.