Gov't to block CLICO lawsuits

The Trinidad and Tobago government will table legislation today that will prevent policyholders with the embattled Colonial Life Insurance Company (CLICO) from taking or continuing any legal action against the central bank for recovery of money.

Finance Minister Winston Dookeran will also pilot legislation allowing for the buyout of certain rights held by CLICO and British American (BAICO) policyholders.

CLICO and its sister company, BAICO, collapsed in January 2009. Trinidad has pumped TT$5.1 billion (US$850 million) in CLICO between February 2009 and May 2010.

Last year, Dookeran announced a compensation plan of up to TT$75,000 (US$12,500) per client. Investors owed more than TT$75,000 would be paid the excess over 20 years at zero interest.

The Purchase of Certain Rights and Validation Bill 2011 seeks to "provide for the purchase of certain rights" of the holders of short-term investment products issued by Colonial Life Insurance Company (Trinidad) Ltd and British American Insurance Company.

The legislation provides for the minister to "issue 20 bonds of varying maturities from one to 20 years, and which shall not exceed in the aggregate TT$10.7 billion (US$1.7 billion), after which he may issue additional bonds."

The amendment to the central-bank legislation indicates that no creditor, shareholder, depositor, policyholder, or any other person, shall have any remedy against the institution in respect of any claim and that these people shall not "continue any action, execution or other proceedings or seek to enforce in any way whatsoever without limitation in Trinidad and Tobago, any judgement or order obtained in Trinidad and Tobago or any other jurisdiction against the institution or its successor ... ."

In July, the CLICO Policyholders Group said it was encouraged by the ruling of the High Court that ordered the financially troubled CLICO to repay nearly TT$60 million (US$10 million) to six policy holders.

The group has already criticised the government's decision to table the amendments, noting that CLICO remains a going concern and as such still has contractual obligations to its policyholders.