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Appointment of the Judicial Manager

 

The Supreme Court today widened the scope of appointment of Judicial Manager, Glenford McLeish over the insurance portfolios of Mutual Life, Dyoll Life and Crown Eagle Life. Based on court documents filed by the Superintendent of Insurance, Errol McLean, attorneys at law acting for the Superintendent submitted that it was necessary and in the best interests of the policyholders for the Judicial Manager to be appointed with respect to all the insurance business of the three companies, since it was difficult for the Judicial Manager to deal with only part of the insurance business of the companies.

Previously, the Judicial Manager’s authority was limited to the interest-sensitive life insurance policies sold by the three failed life insurance companies. Following his appointment by the Supreme Court on February 11, 1999 the Judicial Manager endorsed and recommended a joint FINSAC/BNS initiative for the payout of holders of these policies. This led to the conclusion of an agreement between FINSAC, Bank of Nova Scotia and ScotiaBank Jamaica Trust & Merchant Bank which allowed policyholders to receive up to $200,000 cash immediately against the value of their policies, and the balance over a period of five years.

In his report to the Court on March 26, 1999, the Judicial Manager also recommended that the traditional life insurance business of the companies be transferred to suitable purchasers. Since then, Guardian Life of Trinidad and Jamaica’s First Life Insurance Company were successful in their bid to acquire this business and negotiations are currently underway to finalise the transfer of the portfolios.

Based on today’s order, the Judicial Manager will be involved in these negotiations and if as anticipated, agreements are reached with the successful bidders, his report, which is to be submitted within 60 days, will recommend to the Court that it approves the agreements for transfer as being in the best interests of the policyholders.

FINSAC Managing Director, Patrick Hylton, said that both FINSAC and the Superintendent wished to see the policies transferred as quickly as possible to the successful bidders, and this was the reason for today’s application to the Court. He pointed out that if the alternative approach set out in the Insurance Act was followed, the transfer of the portfolios would take anywhere from nine to twelve months. However, with today’s order, the process of the transfer of the portfolios could be substantially shortened, with the final transfer possibly taking place as early as the end of July.

Mr. Hylton emphasised that the transfer of the policies will not involve any loss of benefits to current policyholders and that the successful bidders were in a position to commence full administration of the portfolios. He said that the companies are currently entering into interim management agreements to permit Guardian Life and First Life to manage the portfolios until the transfer is approved by the Supreme Court. The Court is expected to consider the Judicial Manager’s recommendation in late July, and if it approves the recommendation, the policies could be transferred at that time.

Under the Insurance Act, the Judicial Manager is appointed by the Supreme Court, and has powers to conduct the management of the insurance business of the insurance companies placed under his care. At an appointed time, the Judicial Manager then reports to the Court as to the most advantageous action to be taken in the interests of policyholders.

 

 

June 24, 1999

 

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