The head of the Clico Policyholders Group (CPG), Peter Permell, has issued a caution to companies that may be interested in acquiring the State's 49 per cent shareholding in Clico that Executive Flexible Premium Annuity (EFPA) policyholders of the insurance company are entitled to claim the 15 per cent residual balance on their policies plus the accrued interest.
In a news release yesterday, Permell disputed an assertion made by Finance Minister, Colm Imbert, that the 'assenting' EFPA policyholders 'sold' their policies in return for $75,000 in cash and zero-coupon bonds for a period of 20 years.
"This is simply not the case as there is no legal framework under the Insurance Act that allows a policyholder to sell his or her policy, and as such Clico's legal liability as trustee is not extinguished," Permell said.
In fact, he said the group has been advised that according to section 170 (6) of the Insurance Act, “An assignee under a duly registered assignment shall have all the powers and be subject to all the liabilities of the assignor under the policy, and may sue in his name on the policy, but nothing in this section shall be construed so as to admit the assignee to membership of an insurer or to deprive the assignor of his membership in respect of a policy, except as provided in the instruments constituting the insurer or in its articles of incorporation, by-laws or other constituent document.”
Permell said, as a consequence, 'assenting' policyholders not only continue to have valid contractual arrangements with Clico, but they are now entitled to claim, from Clico, or whoever acquires the shares of company, the 15 per cent residual balance plus the accrued interest on their policies.
He placed the EFPA policyholders' entitlement to claim the residual balance owed to them in the context of the Government having been fully repaid by Clico in 2023.
Permell noted that reminded all stakeholders and the wider public that Clico is now in the black, based on its 2023 audited financial statements which disclosed $3.18 billion in accumulated surplus and $2.30 billion in net profit.
Permell also challenged comments made by Imbert in Monday's 2025 budget presentation.
Imbert said, "I have noted a false narrative circulating that the Government has been repaid all that it is due for the 2009/2010 Clico bailout. This is entirely untrue, since the Clico bailout involved not only the insurance company, but it also involved the bailout of CL Financial and its subsidiaries, as well as companies like Clico Investment Bank, British American Insurance and so on.
"Far from being fully repaid, the Government is still owed over at least a further $13 billion in taxpayers’ funds injected into CL Financial and the other related companies."
In the news release, Permell said the Minister of Finance seems to have conflated the money that was owed by Clico to the Government with that which is due from its parent company, CL Financial (CLF) In liquidation and its subsidiaries Clico Investment Bank (CIB) and British American Insurance (BA).
According to investor activist, when the minister states “the Government is still owed over at least a further $13 billion in taxpayers’ funds injected into CL Financial and the other related companies,” he is referring to CLF, CIB, BA, but not Clico.
Permell reminded Imbert of his own statement in the Senate on September 9, 2024 that "as of April 2023, Clico’s remaining liability to the Government for the Clico bailout was $1 billion” and that “all issues were thus satisfactorily addressed: Clico’s satisfaction of its obligation under the Insurance Act 2018, with respect to its shareholding in MHIL being reduced to less than 20 per cent; and Clico’s obligation to repay the Government the $1 billion that was still owed in 2023.”
Permell said that the minister cannot have it both ways in that the insurance company could not have repaid its debt to the Government and still be owing money.
