Dookeran's Clico plan faces court challenge

The plan by Finance Minister Winston Dookeran to settle the Clico matter is facing a court challenge.

On Monday the court-appointed representative for Executive Flexible Premium Annuity (EFPA) policyholders, Percy Farrell, initiated legal proceedings against Dookeran.

Farrell, along with Marina Inalsingh, Gordon Rohlehr, David Dayal and Michael Alexander are challenging the provisions on two pieces of legislation passed earlier this month: the Purchase of Certain Rights and Validation Act of 2011(PCRVA) and the Central Bank Amendment Act 2011(CBAA).

The court papers name Dookeran, Clico, the Central Bank and Republic Bank. The focus of the action is in relation to the CBAA, which seeks to prohibit court proceedings against Clico and the Central Bank.

The claimants want the court to interpret the relevant provisions of the two Acts on two questions:

1. The Acts are being challenged because the terms of the Acts claim to prohibit the claimants from continuing these proceedings against Clico and the Central Bank
2. The PCRVA purports to reclassify the EFPA policies as Short Term Investment Products (STIPs) in a manner calculated to deny the EFPA policyholders their status as holders of insurance policies issued by Clico as part of its long-term insurance business as defined by the Insurance Act

The claimants are arguing that the two pieces of legislation constitute a plan by the State to deprive EFPA policyholders of their right to the benefit of having their policies honoured in full or in part.

They are seeking a declaration that they and all EFPA policyholders belong to the same class of beneficiaries as the life policyholders of Clico. They argue further that they are entitled to share equally in the Trust Fund with the life policyholders of Clico.