The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

DNA Leader Branville McCartney yesterday slammed the Christie administration for failing to honour its December 31, 2015 deadline to provide a resolution for the thousands of CLICO (Bahamas) policyholders who lost millions of dollars when the company collapsed.

Mr McCartney, in a statement, said the government’s inaction to date in delivering on its word has now caused “thousands of hardworking Bahamians” to potentially lose “millions of dollars in policy payments” made to the company since its collapse. He further blasted the government for squandering the opportunity to prove that it is “capable of acting to protect its citizenry”.

In November, CLICO (Bahamas) liquidator Craig Gomez, in his latest report to the Supreme Court, said he had no choice but to cancel all health insurance policies unless the government delivered on its $30m guarantee and related resolution promises by New Year’s Eve.

Mr Gomez said it was simply unsustainable to maintain CLICO (Bahamas) health policies because payouts exceeded annual premium income. This, Mr Gomez explained, was steadily eroding the $11.607m CLICO (Bahamas) held in its bank accounts at year-end 2014, thereby undermining his court-ordered mandate to preserve the insurer’s assets for the benefits of creditors.

Over a month later, a government official told a meeting of CLICO (Bahamas) creditors that the Christie administration planned to make an announcement on its proposed resolution by year-end. However, the official said no payments would be immediately forthcoming to the CLICO (Bahamas) annuity holders and creditors – only the promise that the government will finally do something about the matter, which ultimately did not happen, according to earlier reports.

“…We are now days into the New Year and days past the December 31 deadline and still there has been no official word from the government,” Mr McCartney said. “This is unacceptable. These policyholders have a right to know what’s next. After years of waiting they deserve answers and (Prime Minister Perry Christie) should give it to them. He owes them that much.”

The former Ingraham administration encouraged CLICO (Bahamas) policyholders to continue paying their policy premiums after the company collapsed in 2009, on the basis that the entire portfolio would be transferred to a new underwriter – a move facilitated by a $30m guarantee.

The Christie administration won the 2012 general election and in a series of subsequent meetings with policyholders and their attorneys up to June of last year offered a restructured plan.

Rather than the initial $30m guarantee, the current government is dividing CLICO (Bahamas) clients into annuity holders and insurance policyholders, The Tribune understands.

The last proposal, presented in late June 2015, is to pay out annuity holders with products worth less than $10,000 or less. Those holding annuities worth $10,000 or more will get that sum up front, and be paid the rest in government bonds with a seven-year maturity.

Former CLICO (Bahamas) employees also will be paid the severance pay and pension benefits due to them, while insurance policyholders will be transferred either to a new underwriter or special purpose vehicle (SPV) created by the government.

However, without the government delivering on the long-promised resolution, Mr Gomez cannot transfer the insurance policy portfolio to the SPV or a new carrier. No other underwriter is willing to acquire it without the government guarantee being in place to cover the solvency deficiency it will inherit, which becomes important given the scenario facing CLICO (Bahamas) medical insurance policyholders, The Tribune understands.