Head of the Presidential Secretariat, Dr. Roger Luncheon, has said he is assured of the National Insurance Scheme (NIS) getting back all of its $6B that had been invested in the failed financial giant Clico, and that the Scheme will not be disadvantaged by the fall of the company.
Speaking at his weekly post-Cabinet press briefing at the Office of the President yesterday, Dr. Luncheon said that the fate of institutional investors holding executive forms of annuities similar to that of NIS was made clear at a meeting with President Bharrat Jagdeo last Thursday.
“What the President essentially said, which was to buttress an undertaking made in public and in Parliament, is that after the payout of the available sums of money, specific attention will be given to the conversion and liquidation of assets that are not liquid, stocks, bonds, property, immovable or moveable, resolution of litigation… those proceeds would then become available for resolving outstanding obligations and liabilities to the Scheme,” Dr. Luncheon said.
“The fund for the Scheme is about $30 billion that had been accumulated over the 41 years of the existence of the Scheme. About $6B, 20 percent of that, is invested in Clico,” Dr. Luncheon, Chairman of the NIS Board, said.
He said the year and a half that NIS collected no interest or returns on the money invested did not affect the NIS much. He said contributions and income earned from investments form the main sources of growth of the NIS fund.
Questioned about the prospects of a soon recovery of the NIS assets in the company, Dr. Luncheon said the Government’s rescue plan is more than enough assurance to insurance holders in the scheme.
Describing the Government’s rescue plan for the Clico investors and policyholders as sincere, Dr. Luncheon said it is already seeing policyholders of Clico being repaid in full.
The Guyana Government has made available $3.6B to finance the payout and about $2.7B 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.
A total of 4,366 holders of executive flexible premium annuities and other undisputed claims against the company will be paid in full, the President has assured.
Following the September 16 announcement, the Bank of Guyana, in accordance with its appointment as liquidator of Clico Guyana, commenced dispatching letters to policyholders inviting them to visit Clico Guyana’s 191 Camp Street office on specific dates.
Processing was executed on the appointed date in the letters given to policyholders. Additionally, holders of life insurance and other long-term policies are reminded to ensure that their payments are made on time and are up to date in order that their policies remain valid and in force.
The Bank of Guyana further intends to transfer such policies to another insurer which will secure the continuity of those policies under their class of business and the coverage provided.