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Murray supportive of any mechanism to facilitate payout to policyholders
Shadow Finance Minister, Winston Murray, has said that while the newspaper article by Christopher Ram in the Sunday Stabroek News is pointing out the possible pitfalls as it relates to the payout to CLICO (Guyana) policyholders is very informative and to the point, he is supportive of a mechanism that would allow for the speedy repayment to policy holders.
Winston Murray
According to Murray, the overriding concern at the end of the day is that people manage to recoup what they otherwise may have lost and as such, hopes that the government had sought good legal advice before making the pronouncement on how people will be repaid.
He said that he hopes that the article written by Ram would not be dismissed but taken into account by the Government.
Murray did point out that a large amount of the money being used to make the initial payouts to the policy holders will not be coming from the assets of CLICO (Guyana) and as such, the liquidation laws that Ram referred to may not be applicable in this case.
Ram, in his article last Sunday, wrote that he believes that the President will come to regret the generosity of his boast. According to Ram, liquidation is a long and winding road with pitfalls, abysses and craters along the way.
“It is a hugely technical task. There has never been a liquidation of this magnitude and this complexity ever undertaken in Guyana.
It involves novel issues of both legalities and illegalities with the potential for adversarial challenges at almost every stage, particularly given the President’s apparent desire to treat the whole issue as a public relations stunt rather than a serious legal process.
Troublingly, the President has signaled that he intends to control the process, an illegality which would be compounded if the Bank of Guyana as liquidator allows him to take charge.”
Head of State, Bharrat Jagdeo, on Thursday, told the 1,290 CLICO (Guyana) policyholders that within the next three weeks they will receive all their money.
The company has immediate access to just over $600M cash and of that, $100M will be set aside for the liquidation process, President Jagdeo announced.
The President said that the remaining $500M will be set aside to ensure that the liabilities associated with long term insurance business are adequately covered. These are the life insurance and other policies. He explained that the long term insurance portfolio will be separated and sold to other licenced insurance companies.
A further 4,366 policyholders will share some $3.6B made available by the CARICOM Petroleum Stabilisation Fund. The government actually collected some US$15M (G$3 billion) from the petroleum fund.
Jagdeo said that of that money, $2.7B will be used to pay the 4,366 investment annuity policies and other insurance liabilities which are not in dispute. These are the people with savings and other deposits in the company.
President Jagdeo said that in this group all persons with investments and deposits of $30 million and less in the failed insurance company will be paid in full.
The payouts would be at the value of the deposits as at February 2009 when the company was placed under judicial management.
The President said that following the full payment to the 11,290 policyholders, there will be 39 remaining policies which will have to be dealt with.
These will receive up to $30M from some $900M and the remaining payout would be made from monies from the liquidation efforts.
Murray said that while he is supportive of the efforts of the government to seek to have the CLICO (Guyana) policyholders repaid, he is disappointed that a similar approach was not taken with Globe Trust.
That company is currently in liquidation. Murray is questioning the rationale behind the government’s failure to save that company or the victims by the Government.
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