Co-insurers told: show credible evidence of arson or pay claim
By Gitanjali Singh
Insurance broker Bish Panday is challenging the four co-insurers of the Park Hotel who so far have refused to settle the claim by the Kissoon family for its destruction in a May 6 fire to produce any "credible evidence" of arson. "The four companies that have refused to pay the claim have not submitted one iota of evidence to support" the theory of arson, he said. Panday is further challenging the four companies: Colonial Life Insurance Company (CLICO), the North American Fire and Life Company (NAFICO), Hand in Hand (HIH) and the Guyana Cooperative Insurance Service (GCIS) to put their portion of the claim into an escrow account and carry out rigorous investigations within a reasonable time. "Five months have already elapsed and if you cannot link my client to the fire, pay the claim," Panday challenged the co-insurers in a statement to this newspaper. He suggested that two weeks is not an unreasonable time frame and to delay this claim indefinitely is "poor public policy" by the co-insurers. The four co-insurers in a letter to this newspaper said sufficient and detailed investigation into the fire had not been completed for them to determine if the claim is "genuine" to discharge their obligations. "We wish the public to understand that on the issue of claim settlement, it is our responsibility to the insured, our shareholders, policyholders, re-insurers and the community at large to ensure that sufficient detailed investigations are conducted into a fire of this nature, in order that there be no doubt that on the balance of probability, all aspects of the claim are genuine," the four co-insurers stated. However, Panday released correspondence between the insurers of the hotel - including two who have already paid (GTM and the Caribbean Home Insurance Company) and Demerara Mutual Fire and Life which has taken a decision to pay - and himself on the settlement of the claim. On May 30, the seven co-insurers wrote Panday informing him that they could not make an interim pay out on the claim of $420M because an international adjuster was appointed to "deal with this claim". "...To date we are not in receipt of his report nor those from the Fire Services and the Police Departments," they also told Panday. But GTM, the lead insurer with 25% liability and Caribbean Home Insurance, 10%, paid their portion of the claim and the others refused to do the same. Panday on September 11 wrote Hand in Hand, GCIS, CLICO and DEMFIRE, subject to an agreement he reached with the international adjuster on August 17 to settle the claim at $382M. "We were also led to believe that adjusters dealt with the question of the debris and addressed the issue as to whether you have any grounds for denying liability," Panday informed the four. The adjuster indicated that once walls are broached, any trace of accelerant could not be ascribed to any one in particular. The adjuster confirmed that arson was suspected by a local fire inspector who investigated the matter but he pointed out that with rain, there is a slim chance of any traces of an accelerant remaining. The adjuster expressed the view that the insurers had no ground for denying liability. "We find it unacceptable that we can engage in discussion with adjusters and after agreement is reached you refuse to honour the agreement," Panday said in the September 11 letter. He also asked that he be advised of the reasons why the companies are failing to pay so that further action could be decided upon. DEMFIRE two Fridays ago took a decision to pay but CLICO, NAFICO, HIH, and GCIS, stood their ground that they felt the investigations were not detailed enough. They stated they are unaware of any agreement having been reached as regards a settlement by them and said they have never authorised anyone to make any such agreement on their behalf. Panday said the three companies who agreed to pay did so after they received the loss adjuster's report and the fire and police reports which the four co-insurers are now saying are still outstanding. The broker had initially accused the firms of balking at the largest pay out in local dollars in the history of insurance in Guyana. He charged that because of the price war among insurance companies, the firms found themselves in a difficult position to make the pay out. Three of the four co-insurers whose payments are outstanding each have a 15% liability. GCIS' liability is 10%.
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