Insurance Commissioner to make statement on Thursday
President Bharrat Jagdeo yesterday said that there is need for greater co-operation among the regulators of Caricom states as well as need for a number of regulatory changes at both the national and regional levels.
He said these issues will come up at a meeting of the Caricom Heads of Govern-ment to be held in Belize later this week.
During a press conference held at the Office of the President, the Head of State said that following the recent issues concerning CLICO and Stanford Investment Bank there needed to be closer co-operation among the different regulators in the region especially if the region was moving towards financial integration. Consequently he called for a regional regulatory system such as a college of regulators to be established.
Further, Jagdeo said that regulations relating to the investment policies of these large conglomerates may have to be reviewed. Of particular concern to him, was the way some of these firms chose to invest heavily in too few institutions which put them (the firms) at great risk, if these institutions were to fail. Meanwhile the Head of State re-emphasised that persons with investments in CLICO (Guyana) will be protected. Jagdeo said that “the state will guarantee that no policyholder in CLICO (Guyana) will lose their money… so anyone who has money in this institution will not lose his or her money.”
He said that CLICO (Guyana) will continue to honour claims for accidents, medical and fire once the premium payments were up to date. He urged customers to continue to pay their premiums. Jagdeo, meanwhile, expressed his disappointment that some hospitals are refusing to accept the CLICO health insurance cards but said that he understood that some of these institutions may have been owed money in the past and would have been operating on a credit system. He, however, said that customers could pay cash now and reclaim from the institution later.
Jagdeo said that after the current status of the company has been determined by its Judicial Manager Maria van Beek some persons will get back their money immediately, while some will have their policies sold to another insurance company and others will have to wait a little longer to get back their money.
He said that since van Beek has been appointed as Judicial Manager, Canadian Actuaries have been hired and an accounting firm has been identified to examine the records of the local companies and to verify its position.
Jadgeo said that on Thursday, van Beek will provide a detailed statement in a press conference about the state of the company and about the results so far of their deliberations with the Bahamian Liquidator. Last week, paper trail evidence of CLICO (Guyana)’s $6.9B investment in CLICO (Bahamas) had been provided to the Bahamian liquidator Craig Gomez, Finance Minster Dr Ashni Singh told this newspaper
The President said that currently the local company was still looking to get back their investment from CLICO (Bahamas) and said the liabilities of CLICO (Guyana) exceed its assets. He said that if this did not happen and if government were to bail out the institution it will have to examine the company’s short-term and long terms assets and said that the judicial process would have an impact on this. He, however, said that as it stands the crude bail-out figure would be the $6.9 billion (US$34 million) held by CLICO (Bahamas).
Jagdeo, however, was critical of the decision by CLICO (Guyana) to invest in CLICO (Bahamas) referring to it as a “bad investment”. He also said that is was a bad investment decision made by the NIS to make their $6B investment in CLICO (Guyana) and said that once there were high returns the risk was greater. The same opinion was also applied to those who made investments in the Stanford Bank in Antigua. The President said he hopes to get more information on the current situation facing this institution during the meeting in Belize, where he hopes he will get more information from the Antiguan regulators after which the government will be able to make more informed decisions concerning this matter.
Meanwhile, referring specifically to CLICO (Guyana), the President stated that if in investigating, evidence of fraud or insider training was identified, prosecution will follow.
Two Thursdays ago, CLICO (Guyana) was placed under judicial management following an order by the Supreme Court in Nassau to send CLICO (Bahamas) into liquidation on February 24. Craig Gomez of Baker Tilley Gomez has been appointed as liquidator for the company.
CLICO (Guyana) had invested $6.9 billion (US$34 million) which represents 53% of its assets in the Bahamian company. Although these investments were liquid on paper investigations have revealed that this sum has been tied up in real estate investments that CLICO (Bahamas) had in Florida via subsidiaries.
