Last Sunday’s Guardian Editorial headlined, Time for action on Clico, must indeed be commended as the Clico Policyholders Group believes it represents fair and balanced commentary and sound advice to the Keith Rowley-led government. The editor is also spot on in lamenting the fact that last Saturday (January 29) marked the seventh anniversary of the Clico debacle and, by extension, the failure of consecutive governments including the Central Bank, to bring much needed closure to this long outstanding matter.
In fact it’s almost four months since this new government passed its 2016 budget titled Restoring Confidence and Rebuilding Trust: Let us do this together, after having received an overwhelming mandate and tremendous goodwill from the electorate inclusive of thousands of Clico policyholders. However, as far as the public is aware, the closest this government has come to addressing the Clico issue is the Finance Minister’s policy statement that “the current PNM administration will make our best effort to bring this matter to an amicable conclusion, in the interest of all concerned and the country at large.”
To the minister’s credit, he was careful to point out that the previous PNM administration had finalised a structured Clico resolution payment plan which had the support of all stakeholders. However, the PP administration abandoned this plan and the matter subsequently became embroiled in controversy and litigation. It is important to note that a crucial part of this plan was a sovereign guarantee given to policyholders by the said PNM administration that their funds were safe and they had nothing to worry about. As a consequence, policyholders relied upon this guarantee and did not cancel their insurance contracts and withdraw their funds.
Moreover, the decision to intervene into Clico by the PNM administration in 2009, of which both the current Finance Minister and Prime Minister were a part, was to minimise the risks posed to the financial system, restore public confidence and trust in Clico and, most importantly, protect “third party” policyholders. The very same “public confidence and trust” that the current PNM administration is attempting to restore via its budget statement.
The same public confidence and trust that was destroyed in 2010 when the PP administration callously reneged on the above guarantee, enacted legislation to prevent policyholders from taking action against Clico and the Central Bank via the courts, stopped their interest payments and rolled out the unjust zero-interest bonds over a period of 20 years.
Ironically, the thousands of policyholders who were affected by this unfair and (soon to be determined by the Privy Council) illegal decision are the same teachers, nurses, policemen, young professionals, senior citizens, retirees, entrepreneurs and business people etc, to whom the Government is now appealing for confidence and trust. It therefore shouldn’t take a rocket scientist to figure out that unless and until the Clico matter is amicably and satisfactorily resolved the restoration of confidence and trust will remain a fleeting illusion to be pursued but never attained.
Moreover, it should come as no surprise to anyone that the big question on the minds of policyholders, now that according to the Central Bank Clico is solvent, its statutory fund is fully funded ($22.4 billion as at the end of December 2014 as per actuarial certificate) and most importantly the PNM is back in power, is: What’s causing the delay and is this PNM administration’s credibility now at stake?
On a more positive note and consistent with this administration’s stated commitment to meaningful stakeholder engagement, we recently received word that the Finance Minister has agreed to meet with us after Carnival. We thank him kindly and look forward to the opportunity.
Peter Permell
Clico Policyholders Group