Tuesday, February 20, 2018

CLICO agents’ lawsuit dismissed

CLAIMS filed by two insurance agents challenging the constitutionality of the Central Bank (Amendment) Act 2011, which prevented them from taking legal action against failed insurance company CLICO were dismissed yesterday by High Court judge Justice Ricky Rahim.

Rahim, presiding at the Hall of Justice in Port of Spain, dismissed the claims which were filed by Myron Rudder and Barbara Kanhai who argued that the Act was in violation of their rights under Sections 4 and 5 of the Constitution and also infringed on the principle of the separation of powers.

Rudder and Kanhai claimed that they had entered into written agreements with CLICO on August 1, 2001 and August 20, 2000, respectively, for inter alia the soliciting of applications for insurance and other financial products and receiving and remitting the initial premium on the applications.

As a result of the agreement, Rudder and Kanhai said they were employees of CLICO and not independent contractors as they were at all times subject to the company’s direct control.

With CLICO’s financial collapse in January 2009, the then-PNM government bailed out the company by offering a bailout to be repaid in order for CLICO to maintain its operations.

Rudder stated that as a result of the collapse, CLICO was in breach of the agreement, saying that the company failed to pay him commissions, managers’ bonuses and managers’ premium income benefits totalling the sum of $1,444,795.78.

Kanhai said the company failed to pay her commissions and contributions due on a pension plan in the total sum of $414,431.94 as at 2008.

CLICO had refused to pay the money but agreed in August 2011 to have an arbitrator appointed to settle the dispute.

However, Rudder said in March 2012, CLICO terminated the agreement with him. 

Kanhai testified that the agreement she had was terminated in June 2012.

Following the termination of the agreements, Rudder and Kanhai filed the constitutional claims on December 18, 2012.

However, the Central Bank (Amendment) Act came into force on September 20, 2011.

In his 62-page judgement Rahim dismissed the claims saying that they were not filed prior to the Act coming into force.

Additionally, Rudder and Kanhai were also ordered to pay 80 per cent of the legal costs incurred by CLICO during the course of the trial.