By NEIL HARTNELL
Tribune Business Editor
Calls for CLICO (Bahamas) policyholders to still pay their premiums have become "an albatross around the neck" of 700 mostly-elderly clients whose medical policies will be cancelled by Friday.
Bishop Simeon Hall, the retired pastor who was himself a victim of the insolvent insurer's collapse, told Tribune Business yesterday that many CLICO (Bahamas) medical policyholders have been calling him "in despair" over the impending loss of insurance coverage.
Many fear they will be unable to find replacement coverage due to their age, and Bishop Hall said their "nightmare" showed why the National Health Insurance (NHI) scheme much-trumpeted by the former Christie administration was necessary.
"These are elderly people, and it's difficult to get any new insurance anywhere else," he said of the 700's plight. "Former Prime Minister Hubert Ingraham encouraged them to keep on paying, and it went well initially. I supported the idea to keep on paying, and it's become an albatross around the necks of these people because they have ultimately lost their insurance."
Bishop Hall, who held an annuity with CLICO (Bahamas) when it was placed in court-supervised liquidation in February 2009, said that while he has recovered some of his money those with medical insurance stand to lose all.
Revealing that "95 per cent" of medical insurance policyholders who have contacted him to-date are elderly, he told Tribune Business: "They're despairing that they kept on paying on the advice of Prime Minister Hubert Ingraham and the thing has gone belly up.
"This necessitates why National Health Insurance (NHI) needs to be pushed forward. This could be the salvation for those waylaid. They're despairing and there are so few people to speak up for them.
"People are calling because they cannot afford health coverage, and that's wrong in a progressive society. Gambling is a choice we make, but when you put money into insurance you expect coverage and coverage to reach maturity."
Bishop Hall also criticised the church community for a lack of advocacy on the CLICO (Bahamas) matter, saying: "We complain about the bar rooms and gambling outlets, but there's a church on every corner in the Bahamas.
"There are 4,000 churches in the Bahamas, and we tend to be the last light rather than the head light of progress because we are too passive. Passivity is not always a virtue."
Tribune Business understands that the remaining CLICO (Bahamas) medical policies have been progressively cancelled by liquidator, Craig A. 'Tony' Gomez, throughout May with the final terminations set for the Friday Labour Day holiday.
The Baker Tilly Gomez accountant and partner gave policyholders two months' notice of his intentions via a series of newspaper advertisements, saying he "regrets.... taking this course of action".
There was no explanation for the move, but in effect the 'writing has been on the wall for some time' given that CLICO (Bahamas) medical insurance claims payouts significantly exceed the annual premium income paid to Mr Gomez.
This has severely depleted the insolvent insurer's dwindling cash pile and, given the company's status under compulsory liquidation through the Supreme Court's supervision, the liquidator has had no choice but to protect the remaining funds.
Mr Gomez, in his last report to the Supreme Court, said the insurer, which was suffering a $55.817 million solvency deficiency at end-June 2017, had at that date just over $7 million in its accounts to pay ongoing expenses.
He was on the verge of cancelling all CLICO (Bahamas) medical insurance policies some two years earlier, only to relent after the former Christie administration stepped forward at the 11th hour with a 'rescue plan' for the insolvent insurer.
The liquidator warned then that he had little choice because high claims payouts were eroding CLICO (Bahamas) cash reserves, undermining his duty to preserve and maintain the asset for the benefit of creditors.
Figures supplied to Mr Gomez by insurance actuaries, Morneau Shepell, showed that since CLICO (Bahamas) was placed into Supreme Court-supervised liquidation in February 2009, group medical claims payouts to policyholders exceeded premium payments by 40 per cent up until end-2014.
Over that six-year period, Mr Gomez had ensured CLICO (Bahamas) paid out $4.191 million in medical claims, yet only received $3 million in premium, creating an unsustainable health claims ratio of 140 per cent.
Mr Gomez is 'gagged' from speaking publicly by the Supreme Court, but a source familiar with the situation said yesterday that only 700 policyholders were affected by this month's cancellations. Another 300 had cancelled immediately on hearing of the liquidator's intentions.
"It's a drain on the estate," the source said of the rationale, "and those policyholders received significant benefits. They may be the only policyholders in the country not to receive a premium increase in nine years. They have nothing to complain about."