Govt pays out $870m to Clico, BA policyholders

Government has in the last five months paid out almost $870 million to 11,361 clients of Clico and British American Insurance Company Ltd (BA) who had investments in annuities and mutual funds. Contacted yesterday, the Ministry of Finance stated that the number of Clico policyholders with investments of $75,000 and over was 10,035, and 1,226 for British American.

According to Dominic Hinds, communications specialist in the Ministry of Finance, the total of initial payments to Clico customers was $777,404,908.17. And the value of bond allocation was $5,762,636. As for BA, $92,201,839.06 was paid out in cash. The allocation of bonds was $365.4 million. The total value of initial payments was $869,606,747.23.

And the total of bond allocation for Clico and BA was $6,128,036. Hinds stated that the acceptance rates for holders of the Executive Flexible Premium Annuities (EFPA) was 73 per cent, and 62.4 per cent for the Core Fund Series 6—mutual funds. He said Government’s bailout offer for the insolvent subsidiaries of the CL Financial Group is effective until September 30, 2012.

A statement from the Ministry of Finance read: “Payout under the Short-Term Investments Products (STIPs) portfolio greater than $75,000 EFPA began on December 1, 2011. Payments for CSI or Core Series 6—this represents payments to trade union and credit unions—with principal balances greater than $75,000, began in March 1, 2012.

“CSI: Amounts paid up to April 19 with surnames beginning with ‘A-Z’ represent 62.4 per cent acceptance rate. “EFPA: Amounts paid up to April 19 with surnames beginning with ‘A-Z’ represent 73 per cent acceptance rate.” In the meantime, members of the United Policyholders Group were granted leave for judicial review to challenge Government’s bailout plan for Clico.

Justice Joan Charles delivered a 59-page ruling on Thursday, stating that the group had a reasonable prospect of success for the review.