'Ex-CEO's annuity got 75% interest rate'
GENE Dziadyk, former chief executive officer (CEO) of CLICO, had a US$2.3 million Executive Flexible Premium Annuity (EFPA) with the insurance giant that attracted an interest rate of 75 per cent.
The interest was compounded annually.
This was the testimony of Henry Hamlet, department manager of Group, Health and Life at CLICO, yesterday during the commission of enquiry into the collapse of CL Financial and the Hindu Credit Union (HCU).
On March 17, 2004, while he was still a director at CLICO, Dziadyk (pronounced zadic) purchased a US-dollar EFPA, Hamlet said.
"However, in 2007, he was given by agreement an interest rate of 75.48 per cent compounded over the period 2004 to 2007," he said.
In a letter dated April 24, 2007 from Dziadyk and signed by CLICO's former marketing manager Ian Garcia stated an amendment to the US-dollar EFPA in Dziadyk's name.
"In accordance to the amendment to above policy dated March 17, 2004 and approved by Mr (Lawrence) Duprey an interest figure of 75.48 per cent shall be credited to this policy covering the period March 17, 2004 to April 24, 2007," the letter stated.
Neal Bisnath the lead counsel for CLICO said the payment was made retroactively.
"Every year the interest is calculated and added on to the principle," Bisnath said.
"The interest on the first year would be just over US$1.7 million, so the amount over year one would be just over US$4 million. The interest on that would then be just over US$3 million, so at the end of year two Mr Dziadyk's policy went up to over US$7 million. The interest on that in year three will be over US$5 million, so at the end of year three which would have been April 2007, the policy would then be worth US$12.5 million," Bisnath said.
"So in three years he moved from US$2.3 million to US$12.5 million," Bisnath said.
Hamlet said Dziadyk has already withdrawn US$10 million from the EFPA.
Last month the Express exclusively reported that Dziadyk was facing eviction from his home at Mississauga, Ontario, Canada and was willing to tell all to the police or anyone else, in the wake of a criminal investigation of key executives of the collapsed insurance giant.