PORT OF SPAIN, Trinidad – A High Court judge has ordered the financially troubled Colonial Life Insurance Company (CLICO) to repay an nearly TT$60 million (US$10 million) to six policy holders.
In a 51-page ruling yesterday, Justice Maureen Rajnauth-Lee ordered that in addition to the TT$58.7 million (US$9.7 million) to be paid to the six CLICO Executive Flexible Premium Annuity (EFPA) policyholders, the company must also meet legal costs estimated at more than one million (US$166,660)).
But the High Court has also granted a 42 day on the ruling since CLICO indicated it will be appealing Rajnauth-Lee’s ruling.
The St Christopher and St Nevis Security Services was among those named in the law suit against CLICO. The others are attorneys Alvin Fitzpatrick, SC, and Lesley-ann Lucky-Samaroo.
The six had sued for the return of money which they invested in CLICO.
The policyholders in their suit claimed the policies were merely contracts in the nature of deposits and not EFPA investments, and became due some time ago. They said they wanted to utilise their policies as investment/savings mechanisms.
In the claims, the policyholders signed an annuity application form and paid money in the claims as deposits/contributions. CLICO then issued certificates for the EFPA agreements.
But CLICO argued that the policies were for an annuity, and the annuity became due at the retirement age stipulated in the policy.
The insurance company, whose financial problems have sent shockwaves across the Caribbean, also argued that by asking for their money, the EFPA policyholders surrendered their policies of insurance before the stipulated retirement ages.
The court was also asked to consider specific issues of law, namely, whether the provisions of Sections 134 and 135 of the Insurance Act Ch 84:01 applied to the EFPA agreements and whether CLICO’s actions were the subject of a statutory immunity, by virtue of Sections 3 and 44H of the Central Bank Act.
The policyholders put forth several arguments, some of which included, “the term of the agreement had expired by effluxion of time, and money paid thereunder was recoverable in accordance with the terms of agreement; the EFPA agreement was not a written contract and, therefore, not a policy under the Insurance Act.”
Justice Rajnauth-Lee, on ruling whether the provisions of Sections 134 and 135 of the Insurance Act Ch 84:01 applied to the EFPA, said: “The court viewed Section 134 as conferring a right on owners of policies who did not enjoy the right to surrender at all or enjoyed it, but only on certain restricted terms which may have included penalties for surrender.
“Accordingly, it was Parliament’s intention to provide relief to those owners of policies, so that those with more favourable contractual terms would not be in an advantageous position over those who had no such contractual provisions for surrender,” she said.
“In my judgment, for the court to find favour in CLICO, in relation to the construction of Sections 134 and 135 of the Insurance Act, would be an exercise of judicial legislation instead of judicial interpretation.” (CMC)
