Guyana Government Takes Steps to Protect CLICO Policyholders, Pension Funds
http://www.caribbeanpressreleases.com/articles/4681/1/Guyana-Government-Takes-Steps-to-Protect-CLICO-Policyholders-Pension-Funds/Page1.html
S Coward
By S Coward
Published on 27-Feb-09
Feb. 27, 2009 -- In an effort to protect CLICO policyholders and pension funds in
Guyana, including the National Insurance Scheme (NIS), Government has
approached the High Court yesterday and obtained an order placing CLICO
Life and General Insurance Company (South America) Limited, otherwise
known as CLICO Guyana, under judicial management.
Commissioner of Insurance appointed judicial manager
Georgetown -- Feb. 27, 2009 -- In an effort to protect CLICO policyholders and pension funds in
Guyana, including the National Insurance Scheme (NIS), Government has
approached the High Court yesterday and obtained an order placing CLICO
Life and General Insurance Company (South America) Limited, otherwise
known as CLICO Guyana, under judicial management. In this regard, the
Commissioner of Insurance, Maria Van Beek, has been appointed the
judicial manager of the local company in accordance with the Insurance
Act 1998.
President Bharrat Jagdeo, at a press conference today at the Office of the President, stated that this action became necessary when the Bahamian regulators, on February 24, announced that they had obtained a liquidation order from the courts in relation to CLICO Bahamas Limited, previously known as British Fidelity Assurance Limited.
Liquidation is a means of bringing the company to an end, by selling off its assets, paying its creditors from the proceeds and distributing any remaining funds to the shareholders. Based on the information received by Government, CLICO Guyana has $6.9B or approximately US$34M invested in CLICO Bahamas which represents 53% of the Guyana company’s total assets. The NIS, in turn, has invested $6B in CLICO Guyana.
The Commissioner of Insurance has instructed CLICO Guyana over a year ago and more recently to reduce this exposure. Further, although the investments held in CLICO Bahamas were in the form of liquid instruments (can be converted quickly into cash), investigations by the authorities revealed that the Bahamas company was exposed to real estate investments in Florida through related party transactions with other subsidiaries in the Group. As a result, CLICO Guyana has been unable to convert its holdings into more suitable investments despite repeated instructions by the Government to do so.
With Government’s move and Commissioner Van Beek assuming control over CLICO Guyana, it is anticipated that a fuller assessment of the financial position of the Company will be obtained and greater protection would be offered to policyholders.
“Government intends to work towards recovering the sums outstanding from the Bahamas, and to protect the interests of all policyholders of CLICO Guyana. In this regard, policyholders will be contacted and provided with further information shortly,” President Jagdeo stated.
Answering a question of what will happen to the employees of CLICO Guyana and whether they will be paid, President Jagdeo stated that the Commissioner now has authority over the company and would meet with the staff shortly to decide what staff she will need to meet her institutional requirement to safeguard the policyholders’ interest.
President Bharrat Jagdeo, at a press conference today at the Office of the President, stated that this action became necessary when the Bahamian regulators, on February 24, announced that they had obtained a liquidation order from the courts in relation to CLICO Bahamas Limited, previously known as British Fidelity Assurance Limited.
Liquidation is a means of bringing the company to an end, by selling off its assets, paying its creditors from the proceeds and distributing any remaining funds to the shareholders. Based on the information received by Government, CLICO Guyana has $6.9B or approximately US$34M invested in CLICO Bahamas which represents 53% of the Guyana company’s total assets. The NIS, in turn, has invested $6B in CLICO Guyana.
The Commissioner of Insurance has instructed CLICO Guyana over a year ago and more recently to reduce this exposure. Further, although the investments held in CLICO Bahamas were in the form of liquid instruments (can be converted quickly into cash), investigations by the authorities revealed that the Bahamas company was exposed to real estate investments in Florida through related party transactions with other subsidiaries in the Group. As a result, CLICO Guyana has been unable to convert its holdings into more suitable investments despite repeated instructions by the Government to do so.
With Government’s move and Commissioner Van Beek assuming control over CLICO Guyana, it is anticipated that a fuller assessment of the financial position of the Company will be obtained and greater protection would be offered to policyholders.
“Government intends to work towards recovering the sums outstanding from the Bahamas, and to protect the interests of all policyholders of CLICO Guyana. In this regard, policyholders will be contacted and provided with further information shortly,” President Jagdeo stated.
Answering a question of what will happen to the employees of CLICO Guyana and whether they will be paid, President Jagdeo stated that the Commissioner now has authority over the company and would meet with the staff shortly to decide what staff she will need to meet her institutional requirement to safeguard the policyholders’ interest.