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CLICO Guyana payouts may begin as soon as next week

Wednesday, 22 September 2010 12:00 Written by  font size decrease font size decrease font size increase font size increase font size

Head of the Presidential Secretariat Dr Roger Luncheon and Finance Minister Dr Ashni Singh talk to Editor-in-Chief of the Six o’clock News Michael Gordon as part of a panel discussion on the CLICO Guyana payout

GEORGETOWN, Guyana (GINA) -- Policyholders of CLICO Guyana will soon begin receiving letters inviting them to visit the company on an appointed day upon which the decisions announced by President Bharrat Jagdeo on Thursday last will be implemented and transactions concluded in a timely manner.

This is according to Finance Minister Dr Ashni Singh, who was at the time part of a panel discussion on the National Communications Network (NCN) along with Head of the Presidential Secretariat Dr Roger Luncheon, in which issues relating to the impending payout of CLICO Guyana’s policy holders were discussed.

Singh noted that with the announcement by the president last Thursday, in which he declared government’s injection of GY$3.6 billion (US$17.4 million) to ensure policy holders were repaid, came the feverish work by the liquidator to ensure that this was done in a fast but orderly fashion.

The finance minister indicated that this could be as early as next week and inherent in the letter to be received is a telephone number that can be used for the purposes of rescheduling appointments where necessary.

Luncheon noted that throughout the entire process, government’s focus has always been on the welfare of the policyholders. He noted that there was always great concern for the great number of Guyanese that would have been affected, had the matter not been properly handled.

Referring to the fall of CLICO and the ensuing events, Luncheon pointed out that events of this nature were not frequent in the lives of governments across the region, and as such deserved careful analyses.

Luncheon said that CL Financial, the parent company of CLICO, was peculiar in the fact that it had a presence in almost every Caribbean territory, and therefore as responses were being implemented, government got a chance to observe and compare its strategies in the face of the crisis.

This was endorsed by the finance minister who pointed to governmental engagement and response at every stage in the process. Singh related that as soon as the news of the collapse of the entity was received, President Jagdeo was immediately apprised and moved to establish, with other CARICOM heads of government, the circumstances of the group in their territories. What resulted was a sustained engagement amongst the heads for the duration of this issue.

With that initial contact having been made, the government followed closely the implementation of the memorandum of understanding (MOU), signed in Trinidad and noted that the government then moved to the local courts for judicial management of CLICO, one day after a judgment was granted by the Bahamian courts against the Bahamian subsidiary there.

Singh related that after the judgment was granted, the government immediately put in place mechanisms that would safeguard the assets of the company and to ensure that they were managed in a way that was consistent with the provisions of the Act governing judicial management.

He noted that the office of the Commissioner of Insurance, succeeded by the Bank of Guyana, has been discharging the functions of judicial manager. Singh noted that that within two months of judicial management being assumed, reports returning to the courts indicated that the local company faced extreme distress if the value of the investments in CLICO Bahamas were impaired.

Given the gravity of this information, government then petitioned the courts for permission to wind up the operations here, for the protection of the interest of the policyholders, the finance minister said. He noted that this was done early in the process but was met with opposition in some quarters designed to frustrate the judicial management and affect the outcome.

On Thursday last, President Jagdeo rolled out a rescue plan that guarantees refunds to all those who were affected by CLICO’s financial debacle.

Jagdeo explained that policyholders with investments in the company less than GY$30 million (US$145,000) as of February 2009 will be repaid in full.

The Guyana government will make available $3.6 billion to finance the payout, which Jagdeo assured will be executed within weeks. About $2.7 billion will be used to pay off in full all holders of investment annuity policies and other insurance liabilities not in dispute, subject to a maximum limit of $30 million per policyholder.

According to Jagdeo, a total of 4,366 holders of executive flexible premium annuities and other undisputed claims against the company will be paid in full.

The 39 large policyholders of the company will then be given support and a remaining $900 million will be utilised to pay these policyholders up to a maximum of $30 million each, with priority given to institutional policyholders.

With most of the liabilities remaining in government agencies such as the National Insurance Scheme (NIS), the Guyana Forestry Commission (GFC), Dependants’ Pension Fund and Guyoil, Jagdeo said government will also have to ensure that their interests are protected.
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