The conclusions of any investigation will put significant blame squarely on the shoulders of the management of CLICO Guyana. As an insurance company operating under the Insurance Act 1998, management should have known and followed the rules. The rules include that 85% of their statutory fund should be invested locally. However, this was not done. As is well documented, 53% of the assets of CLICO Guyana were invested in CLICO Bahamas. One of the unknowns that will come out of any investigation will be how much influence the management of the CL Financial Group in Trinidad had on the actions of its local counterparts here in Guyana.

One cannot doubt that significant pressure was exerted by Mr. Duprey and his cohorts in Trinidad on the local company to use its funds to finance the expansion of the group. This was the aggressive and risky strategy that the Governor of the Central Bank of Trinidad & Tobago, Ewart Williams, mentioned in his address when the government there was forced to bail out the Group on January 30.

Some other things that the investigation will discover were already made public knowledge by the Minister of Finance when he addressed Parliament in March. These would include that the Commissioner of Insurance has been trying to get CLICO Guyana to return their investment in CLICO Bahamas since 2007 when they had established their statutory fund, and despite giving her assurances that they would do that, the company never did.

Another finding of the investigation will be that the President had requested information from the insurance companies last year when there were problems in the US financial markets about their international exposure. As they assured the public on January 30 that they were not exposed to the operations of the group in Trinidad, CLICO Guyana assured government that they were not exposed. Not true! Not true at all!

However, the most important finding of any investigation into CLICO Guyana will be something that will not surprise government but will disappoint the opposition parties that are seeking to pin the blame squarely on the chest of the Jagdeo administration.

What will be discovered is that CLICO Guyana’s investment was impaired because of the deterioration of the real estate market in Florida, for which government is not responsible. The fall in the real estate market is due to the bursting of the US housing bubble where there were too many houses for sale and not enough buyers. Applying the supply and demand rules, when there are more goods available for sale than there are buyers to purchase them, the price of the goods will fall until the buyers and sellers reach equilibrium. Government is not responsible for that either.

The bursting of the housing bubble resulted from US bankers giving credit to any and everybody that wanted a loan to buy a house, even if there was little likelihood that they could repay the loan. They were pursuing profits at the expense of responsible banking. Do you blame our government for that too? I think not!

What is lacking and needs to be remedied are tools and regulations to get local companies to comply when they are instructed to get something done by the regulators. The Commissioner of Insurance has been demanding that CLICO Guyana return their investment to our shores but like a stubborn child, they chose to ignore her instructions. What was she to do when they did not comply? She could not take over the company as there would have been a hue and cry that Government was nationalising a private business.

So bring on the investigation and let the findings shame those who are so adamantly calling for it.
QUACIE GALLOWAY