CLICO policyholders file appeal to Privy Council
The CLICO United Policyholders Group has filed an appeal before the Privy Council claiming that Trinidad's Court of Appeal erred when it overturned a lower court decision and ruled in favour of the Trinidad & Tobago government, which claims that there is no more money to pay the policyholders of the failed insurance company.
Former Attorney General Ramesh Lawrence Maharaj, addressing policyholders in Chagnuanas in Central Trinidad, said that the appeal had been filed last Friday.
The policyholders contend that the Court of Appeal erred in several areas, including allowing the Government to withdraw its concession that the group of policyholders had legitimate expectations based on promises made by the previous government; that the promises made by the last administration were not clear; and that the government was justified in breaching the legitimate expectations of the policyholders.
The Trinidad government has said it spent billions on a bailout plan for the insurance giant after it collapsed in 2009. The Kamla Persad-Bissessar-led administration also established a commission of inquiry to investigate the circumstances that led to the collapse of CLICO.
Maharaj told policyholders that CLICO has approximately TT$17 billion and challenged Finance Minister Larry Howai to provide a detailed account of the company's assets, its current value and potential market value during the time when the reduced offer was made to policyholders in 2011 and up to the current period.
Maharaj said when the former People's National Movement administration recognised that CLICO and its parent company, CL Financial, were experiencing financial difficulties, the then finance minister made an open statement in the Parliament promising policyholders not to remove their monies and investments as they would guarantee its return.
Maharaj said, based on the announcement and because they believed the government guarantee could be relied upon, policyholders kept their money in CLICO.
"They are not asking for money to be paid to them, that does not belong to them," he said, referring to Sections 37 and 80 and of the Insurance Act that provides for a statutory fund, and which compels the government to ensure that an insurance company has sufficient assets or money in that fund to compensate policyholders in the event that the company goes into liquidation.
Maharaj said that the coalition Peoples Partnership government reneged on this guarantee within months of assuming office and that the 350 policyholders were never consulted about their investments before they were offered an enhanced package in 2011.
He said it was also a "scandal in the legal profession" when the government retained a Queen's Counsel to challenge the High Court's decision, which was in favour of the policyholders.
Maharaj said he was confident of winning the appeal before the UK Privy Council. Hearings are expected in March.
"I am 500 per cent confident that you will be successful before the Privy Council. I am telling you today that your judgment in the Court of Appeal was wrong and you will win in the Privy Council," Maharaj told shareholders.