CLICO policyholders vote to sue

Finance Minister Winston Dookeran said Monday that he is disappointed by the decision of the CLICO Policy-holders Group to take legal action against the six-month-old Trinidad and Tobago government.

Last week, Dookeran said Kamla Persad-Bissessar had no intention of following policies that have led other countries into the arms of international lending agencies, and insisted that the original offer made to policyholders to deal with the financial problems at the Colonial Life Insurance Company Trinidad Limited (CLICO) would be pursued.

But on Sunday, policyholders unanimously passed a resolution to take legal action against the state at a meeting called to discuss the government's position on their compensation.

"I am disappointed that the CLICO Policyholders Group has resorted to such methods," Dookeran told reporters, adding "the court can have an independent view" on the issue.

Under the new bailout plan for CLICO, the government said it would make an initial partial payment of a maximum of TT$75,000 (US$12,500) to depositors in the short-term investment and mutual funds, and those whose principal balances exceed TT$75,000 will be paid through a Government IOU amortised over 20 years at zero interest.

"The government is committed to pay TT$500 million (US$83.3 million) a year for 20 years to meet this commitment, and if we had gone on a shorter term we would have had gone to 10 years, we would have had to commit ourselves to one billion (US$166.6 million) a year for 10 years," Dookeran told parliament.

Deputy Chairman of the CLICO Policyholders Group Peter Permell said that the group is putting in place "mechanisms ... to pursue legal action on your behalf" even as he advised members to accept the government's initial TT$75,000 payout offer.

"Take the money once there are no conditions attached to it," said Permell.

"Legal action is an option open to us. We could be suing the directors of the company, the central bank, the minister of finance," he said," adding that "we have to send a clear and unequivocal statement that we are not bluffing."

Dookeran has also dismissed a proposal by the policyholders for government to pay them back a substantial amount of their investments by selling off assets or from profits gained by CLICO, a member of the regional conglomerate CL Financial Group.

- CMC