— Commissioner of Insurance reports
THE probe into the financial status of the CLICO (Guyana) insurance firm, hit by problems with its Trinidad-based parent company, will take about another four weeks, Commissioner of Insurance, Ms. Maria van Beek reported yesterday. She has, however, advised clients whose policies are still in force to continue paying premiums so that they would not lose benefits.

Van Beek, appointed Judicial Manager of the company on February 25 last, told reporters yesterday that she has submitted a preliminary report to the High Court and is to return to the court on March 16 for further directions.

At the briefing in the NCN TV studios in Georgetown, she noted that as Judicial Manager, she is expected to report back to the court with her recommendation regarding the future of the company.

The financial investigation, she said, “is not a quick process, nor an easy one.”

She said an important up-to-date assessment of the company’s financial status is underway with the help of the Nizam Ali and Company accounting firm and its actuary, Prescience Insurance Consultants and Actuaries based in Toronto, Canada.

“While these investigations are being conducted it is important that I seek to operate the company in a manner that will maintain its viability and maximize its ability to meet its obligations to policyholders and creditors”, she said.

Information so far indicates that the company has 14,990 insurance policies, 90 members of staff and about 65 sales agents, she reported.

The Commissioner said those who hold health, motor, fire and other general insurance policies should be aware that their policies will not be renewed when the policy expires and should seek alternative insurance arrangements in anticipation of this.

She said the processing of claims from health, motor, fire and other general insurance contracts will begin as normal and that cheques for these claims previously issued but not presented will have to be reissued and holders of these cheques should contact the company immediately.

Claims from life and pension contracts including surrenders will remain suspended until further notice, she advised.

Van Beek said those who are in any doubt over the status of their policy or require further information can contact the company’s customer service representatives on telephone number 226-2626 or their financial advisor.

She said legal action has been taken against creditors that are part of the Trinidad-based CL Financial Group in an effort to recover the company’s investments in these entities.

Van Beek also noted recent statements by President Bharrat Jagdeo that the state will guarantee that no policyholder in CLIOC (Guyana) will lose their money.

She said policyholders of the company will be written to shortly with further details, adding that claims to health, fire, motor contracts and other general insurance contracts will recommence and be paid once the claim has been verified and payment has been approved as in the normal course of business.

“Claims related to life and pension contracts will not be paid at this time as the assets backing these claims are still being assessed and may be subject to litigation. In addition payment of these claims would quickly erode the liquidity of the company and affect its viability”, she said.

Van Beek said it took most of the last two weeks to verify each of the 1,197 un-presented cheques with the company and the 154 stale-dated cheques and to complete an initial liquidity analysis.

“Having completed this, we are now in a position to resume some normal operations, in particular paying some claims. As a control measure given the large number of unpresented cheques, we will be re-issuing all health, motor, fire and other general insurance cheques that were unpresented as at 25th February 2009 and are asking persons to phone the company if they have one of these cheques to determine the status of the cheque”, she said.

“For those policyholders whose claims we cannot process at this time and other creditors we ask for your patience until the final report to the court is completed. We anticipate that this will take approximately one month. It might be timely at this point to remind policyholders that the government has indicated that policyholders will be protected and they will not lose their money”, van Beek added.

She said policyholders with regular premiums in-force contracts should continue to pay their premiums in light of the assurances given by the government.

“If they fail to do so, there may be severe consequences to their entitlements notwithstanding any guarantees. For example, if you have a health policy in force with monthly premiums, failure to pay the premium when it falls due will result in the termination of the contract and any claims made after 30 days of the expiry of the contract will not be honoured. If you are unsure, please call the company for guidance or contact your financial advisor before taking any decisions”, she said.

The Commissioner advised that upon the expiry date of renewable contracts such as motor policies, these will NOT be automatically renewed.

“At this point these policyholders are no longer covered by their CLICO insurance and should seek alternative insurance arrangements. It is important to note that most general and health are one year policies and since renewal is normally automatic, any CLICO policyholder should check their policy document or renewal notice and determine when their cover expires”, she said.

Dealing with the bid by CLICO (Guyana) to recover some G$6Bln investments in CLICO Bahamas, van Beek said the wind-up of CLICO Bahamas is before the courts in that country.

The matter will be heard March 18 when it is expected that the wind-up and the appointment of the Liquidator will be confirmed, she said.

“Our legal team will be making representations on our behalf. They have already communicated to the Provisional Liquidator in an effort to share information regarding our investments in The Bahamas. However, the Provisional Liquidator has not yet confirmed this investment and may not be in a position to do so until the court has confirmed his appointment. This notwithstanding our claim will be filed with the court”, she said.

Van Beek added that all indications are that this process may take some time to conclude.