What is the status of NIS?

Mar 01, 2009 News

FRONT PAGE COMMENT

A great deal of funds from the National Insurance Scheme (NIS) is involved in the CLICO (GUYANA) imbroglio, funds which if not returned threaten the ability of the Scheme to pay future pensions and benefits to contributors. Further, another significant portion of the assets of the NIS has been invested in the consortium that built the Berbice River Bridge.
Under Article 34 (2) of the National Insurance and Social Security Act, any temporary insufficiency of funds within the NIS will be met through appropriations in the National Assembly.
The Government, therefore, cannot blithely wash its hands of the NIS investment in CLICO (Guyana) under the pretext that the Scheme is autonomous. The fact that NIS has a Board of Directors does not make it any less a public institution for which the government is accountable.
Around the same time that the consortium was being assembled to build the Berbice River Bridge the NIS controversially invested (or lent) considerable sums in (to) CLICO (Guyana) and Hand-in-Hand. The question therefore arises whether, either directly or indirectly, the funds loaned by the NIS were in fact used to finance the investments of these parties in the bridge project.
One of the partners in the Berbice River Bridge is the New Building Society. The New Building Society Act was changed to allow the Society to invest in projects. The regulators did not object to the change, and therefore should explain the rationale and justification for accepting the amendment which allowed NBS to invest in and to recently purchase CLICO’s share in the Berbice River Bridge.
The members of the NBS surely must be interested in an explanation as to the reasons for the purchase of these shares when it is known that the cash flow from the bridge is not up to projection.
Information reaching this newspaper is that, just prior to the government applying for the judicial administration of CLICO, a number of investors either removed or were attempting to remove their monies out of the institution. These persons may have done so without the knowledge of the impending intervention by the government. But it would be helpful if a detailed investigation is launched to determine whether there was any leak of information about the fortunes of CLICO and about the impending move to the Courts, and whether any such leak triggered a run by those who may have come upon this information.
Given the foregoing circumstances and concerns, we feel it will be extremely useful if the Courts would now be petitioned to appoint someone other than, or along with, the Commissioner of Insurance to conduct a detailed inquiry into the matters which we have raised in this front page comment.
Apart from the overwhelming public interest, there is a clear and urgent need to get to the bottom of just what is taking place within a major institution in our financial sector.

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