-after unanimous approval of motion
Working towards consensus to protect policyholders and investors in the wake of CLICO (Guyana)’s financial exposure, the government and opposition have directed a parliamentary committee to monitor the developments at the company.
On Thursday, the PPP/C and the opposition PNCR-1G, the AFC and GAP-ROAR all supported a motion to direct the Sectoral Committee on Economic Services to monitor CLICO (Guyana) and keep it updated on developments. The motion, in the name of PNCR-1G leader Robert Corbin and seconded by PNCR-1G MP Winston Murray, also resolved to call on the government to take all necessary steps to ensure that there would be no financial loss to any policyholder or depositor in CLICO (Guyana) and to secure investments made by the National Insurance Scheme (NIS) in CLICO (Guyana) on behalf of contributors. The Assembly also endorsed statements by the government guaranteeing the savings, pensions, investments and insurances of all investors, depositors, policyholders and contributors of CLICO (Guyana).
There was a suspension of the Standings Orders to allow debate on the motion, which was amended with input from the government members before it was circulated for debate. Representatives from both sides of the house deliberated for almost three hours before agreeing on the language of the motion, but during the debate there was still sharp division over the current state of regulation of the financial sector and the need for an explicit guarantee to policyholders, depositors and other investors that they would not suffer any losses.
With more than 50% of CLICO (Guyana)’s assets invested in CLICO Bahamas, which has been put into liquidation by the Bahamian High Court and the NIS’ $5.6 billion investment in annuities in the local company, Corbin emphasised the implications of the situation for many people. “It affects all of Guyana and should motivate all of us to work for a solution,” he told the Assembly.
He also explained that there was need for an “unequivocal guarantee” of protection for all stakeholders, in light of government’s failure to fulfil or implement previous commitments.
Corbin, who disclosed that he and his wife were both policyholders in CLICO (Guyana), told the Assembly that he was aware that persons were making withdrawals even before the government moved to the court to have the company placed under judicial management. He said while he could have done so, it would have been unethical. However, he noted that the sale to the New Building Society (NBS) of CLICO (Guyana)’s bonds in the Berbice Bridge, valued at $1.5 billion, which was used to provide liquidity to make payments to persons withdrawing their deposits ought to have raised alarms. He said the level of speed at which the sale was concluded suggested that all was not well and that there was information in the public before the government even moved to the court. In this regard, he said there should be an inquiry. He said he did not want to blame the Finance Ministry or the government, but the slothfulness of regulators left much to be desired.
Finance Minister Dr. Ashni Singh, meanwhile, reiterated the need for strengthening legislation and institutional mechanisms in the financial sector and other areas as well, mentioning that he had indicated as much in the budget. He added that there has been some achievement so far, for example in banking supervision, though there are areas for strengthening. Nevertheless, he said considerable progress has been made in putting in place a modern legislative and institutional environment.
Singh emphasised that the motion reflected actions the government was comfortable with. “There must be certain matters that irrespective of our respective political views and political positions that we are able and willing to unite on,” Singh said. “I do believe increasingly that financial stability is a public good that is not to be trifled with,” he added, noting that it is something that must be fought for enthusiastically. He said in reaching unanimity on the motion, there was some degree of achievement.
AFC MP Raphael Trotman also supported the motion but noted too concerns about the exercise of due diligence and prudent management of the financial sector. He noted that many questions still need to be answered to assuage concerns, including those relating to withdrawals before government moved to the court and the sale of CLICO (Guyana)’s bonds in the Berbice Bridge to the NBS and the fate of the proceeds. He questioned whether insider information allowed a ‘selected few’ to remove money. He hoped that the Economic Services Committee would make finding the answers to the questions a priority. Similarly, GAP-ROAR MP Everall Franklin noted the need for a timeline to establish when medical schemes can be reactivated to meet the immediate need of the people as well as where the money would come from if there is need to make payouts.