Clico investors threaten court action over gov't Clico plan

Five Colonial Life Insurance Company Ltd (Clico) policyholders have threatened to go to court to challenge the government's plan to pay Clico policyholders.

In a pre-action protocol letter to Central Bank Governor Ewart Williams and Inspector of Financial Institutions Carl Hiralal, Senior Counsel Dr Claude Denbow cautioned the Government "to desist from implementing its payout plan".

Denbow is acting on behalf of policyholders Percy Farrell, Marina Inalsingh, Professor Gordon Rohlehr, David Dayal and Michael Alexander.

He also raised concerned about the proposed Central Bank Amendment Bill, which the government is withdrawing, saying the measures would raise serious constitutional issues.

Denbow is asking that the Central bank honour its earlier commitments to his clients and others who hold Executive Flexible Premium Annuity plans.

The plan announced in the budget will pay up to $75,000 in cash and the rest in IOU, divided equally over 20 years with no interest.

Denbow has described that plan as “oppressive, unfairly prejudicial to and in unfair disregard of their interests as creditors of Clico.” He has suggested that the Central Bank devise a new plan to “protect and secure the entitlements of EFPA policyholders” within 30 day or face legal proceedings.