Leader of the main opposition PNCR Robert Corbin is pressing government to take over the operations of CLICO (Guyana), calling for an “unequivocal guarantee” to assure policyholders and investors of their claims.
Corbin has tabled a motion to this end in the National Assembly, where he is urging the Bharrat Jagdeo administration to follow the model of the Trinidad and Tobago government and support the continued operations of the company, taking the option of seeking liquidation completely off the table.
The motion, to be seconded by PNCR-1G MP Winston Murray, seeks to have the government take all necessary steps to guarantee the savings, pensions and investments of all CLICO (Guyana) investors, depositors, policyholders and contributors. It is also seeking to have the government secure investments made by the National Insurance Scheme (NIS) in CLICO (Guyana) to protect contributors and beneficiaries from suffering potential losses.
Additionally, the motion also calls for the Assembly to establish a committee to monitor and provide updates on the developments at CLICO (Guyana) and other financial institutions, in the context of the global financial crisis. “The response of the government to this motion would be a clear indication to the citizens of Guyana of its commitment to honour statements made by President Jagdeo and other government spokespersons over the last week,” Corbin told a news conference yesterday, while observing that there are thousands of policyholders who do not know what the future holds.
Corbin said the motion had been approved and it was published on Wednesday and it could be debated at the next parliamentary sitting. He explained that while the Standing Orders stipulate a notice period of over 12 days, he also tabled a motion seeking to suspend the rule, though there would be need for the government’s agreement to go forward. “I trust that [with] all the pronouncements we are seeing in the press, we will really see the attitude of the government,” he said.
Last week, government moved to place CLICO (Guyana) under judicial management, after the Bahamian Supreme Court ordered the liquidation of CLICO (Bahamas), which held 53% of the assets of the Guyana affiliate at the end of 2007. The assets of CLICO (Guyana) that escaped the CLICO (Bahamas) collapse were locked down by the High Court last Thursday after government petitioned the court through Commissioner of Insurance Maria van Beek.
President Jagdeo has said that the winding up of the local company was just one of the options available to the judicial manager but he has expressed hope that the assets could be recovered, saying that government is treating the assets as though they “are not yet lost.”
According to Corbin, with every passing day the revelations surrounding the financial difficulties of CLICO (Guyana) and its associate companies in the Caribbean raise more questions than provide answers and solutions. The responses by officials to the recent revelations by Prime Minister of the Bahamas Hubert Ingraham that there currently appears to be no record of CLICO (Guyana)’s $6.1 billion investment in CLICO (Bahamas), he said, provide no comfort to policy holders and affected persons and institutions.
Corbin added that President Jagdeo’s assurances that all valid CLICO claims will be met, without promising a guarantee by the Government of Guyana, mean absolutely nothing. In the interim, he said, several persons remain vulnerable to excessive losses, in the absence of a formal statement by van Beek, who he said had not adequately performed her duties as regulator. “Was the regulator of insurance companies doing her job?” Corbin asked, after noting that “It is obvious to any average citizen that, until a complete audit of CLICO (Guyana) is done, no one would be able to know the extent of the financial difficulty of the Company.” In a statement on February 28 Commissioner of Insurance van Beek had said that after ascertaining the extent of the exposure of CLICO (Guyana) to overseas investments, she immediately instructed the company to correct this deficiency. According to the release, “the company undertook to do this in a manner that would be orderly and that would avoid undue dislocation to its operations, which would in any case have been harmful to the interests of policyholders.”
Her statement said that it would not have been appropriate for the commissioner to opt for judicial proceedings at this stage because any attempt to obtain the intervention of the court would have required a demonstration that the company was unable to meet its local liabilities, “a condition that was not threatened until very recently. Indeed a move to the court or any other public pronouncement on this matter at that stage could very well have precipitated the demise of the company to the immediate detriment of policyholders.”
Meanwhile, Corbin said debate on the motion would allow Finance Minister Dr. Ashni Singh the opportunity to explain the government’s plans to deal with this serious situation.
The motion notes that Singh did not utilise the opportunity provided last week to inform the National Assembly of the serious developments at CLICO (Guyana), although he ought to have been aware that the court appointed a judicial manager.
The motion has received input from GAP-ROAR MP Everall Franklin, while the AFC has indicated it would likely table amendments to be incorporated.