By RICARDO WELLS

Tribune Staff Reporter

rwells@tribunemedia.net

THE relief originally expressed by many CLICO (Bahamas) policyholders has now turned to frustration, as some owed in excess of $100,000 have been offered “at best” $10,000 in compensation for funds invested into policies with the failed insurer.

Attorney Paul Moss yesterday told members of the media that he was in communication with a number of the company’s former employees and policyholders, many of whom have expressed disappointment with the payments from the policies and investments.

According to Mr Moss, the amount being offered to policyholders does not reflect the promises made by Prime Minister Perry Christie.

“Today, what we have discovered is that many of the promises indicated by the prime minister haven’t materialised and I am not sure, quite frankly, whether the prime minister is aware of what is going on, but we know that what is happening is a disservice,” said the attorney at a press conference yesterday.

While giving his mid-year budget communication in the House of Assembly, Prime Minister Perry Christie promised that a collective $16m cash pay out would be issued to victims of the CLICO (Bahamas) collapse.

The payments began in late March.

At the time, Mr Christie said the insolvent insurer’s executive flexible premium annuity (EPPA) holders, and surrendered pension policies, will receive a cash payment capped at $10,000.

Anything owed above this sum will be paid off via the issuance to former clients of seven-year promissory notes (government bonds), which will provide them with quarterly insurance payments at the prime rate (4.75 per cent).

Vaughn Culmer, CLICO (Bahamas) operations manager, stated that the issuance of the government bonds will “hopefully” take place “within the next few months”.

Meanwhile, Mr Moss said to date, a number of policyholders who are owed sums over $10,000 were to take the “small amount” as payment for their losses.

“I have had an occasion to look at the contract that has been given out by CLICO (Bahamas) for persons signing to get their funds. It is tantamount to an absolute exoneration and release for CLICO, once they sign this paper. This is the interpretation that I have gotten from it. In fact, there is no reference or mention of the government bond,” he stated.

“It doesn’t say if you sign this paper you get you $10,000 and then you can expect to get the balance of your funds owed to you in government bonds. What it does say is once you have signed this paper, you have released CLICO (Bahamas) from all liability and all obligations that they may have owed to you. That is what we have here.”

The attorney warned policyholders that have not yet accepted the pay out offered by the liquidators to properly review their documents to ensure that they were not being cheated in any way.

“In fact, (the document) absolves CLICO, it phases them out of it, we say that the prime minister ought to be aware of what is going on and he ought to make something to be done, so that these people can get their full value,” he said.

“We know that these are desperate times. We are also aware that people need money. But, people ought to be very careful, read their documents to ensure that they get the maximum amount that they are entitled to as oppose to getting the small amount they desperately need right away.”

Retired grandmother Naomi McPhee told The Tribune she continued to make monthly payments on two college savings accounts for her two grandchildren despite CLICO (Bahamas) falling into insolvency in 2009.

The payments totalled $98.20 a month.

She said each policy was due to receive a pay out of $20,000 once the beneficiary turned 18 years old. Her granddaughter, now 24 years old, was due her pay out in 2010, and grandson now 21 years old was due his pay out in 2013.

Mrs McPhee told The Tribune that of the $40,000 her family was owed, they have been offered $440 in the case of her granddaughter and $400 in the case of her grandson.

“I am angry about it,” said Mrs McPhee.

She said she depended on the money to put her grandchildren through college.

“We now have to pay for it,” she said. “Now I’m retired and I was depending on that money to help with the college fee. So I need CLICO to get up and say something to me.”

Another policyholder, Virginia Outten, who estimates that she is owed $334,000 by the insurance company, is worried that she will not get the full amount due to her.

Mr Moss presented the media with a copy of a severance document offered to Ms Outten by CLICO, where the company offered a pay out of $10,000 as compensation.

The CLICO pay out process started in Nassau in late march and then moved to Grand Bahama where nearly 300 policyholders received payments.

Mr Culmer told reporters yesterday that of the 4,800 cheques drafted for this process, officials have already settled 50 per cent of the matters.

The money to CLICO policyholders has been paid out of a $16m government guarantee.