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NIS investment in CLICO will eventually hurt taxpayers – Source

Sep 23, 2010 News

The Nation’s coffers will soon be affected adversely by the investment by the National Insurance Scheme (NIS) in Colonial Life Insurance Company (CLICO) Guyana, according to a well place source within that company.
According to the source, based on the projections of the figures as they relate to expenditure and revenue the latter will soon be less than the required expenditure and the $6B investment in CLICO is impaired and will not be available for use at any time in the near future.
The coffers will be affected given that at anytime NIS is unable to make its payments the beneficiaries are protected in that the company by law has to move to the National Assembly seeking monies to be approved for the Consolidated Fund.
It was pointed out that over the past three years expenditures and revenue was almost at break even and expenditure was projected to increase.
Over the years the revenue collected by NIS has remained stagnant while the expenditure grew so should the monies not be recovered from CLICO (Guyana) soon then it would be unavoidable for NIS to not petition for money from the coffers.
President Bharrat Jagdeo has promised that all affected by the CLICO (Guyana) fallout will be repaid but investments such as the one made by CLICO will have to wait until monies could be recovered through the liquidation process.
The Bank of Guyana, which has been appointed liquidator, will seek to increase the liability of the failed insurance company by raising more money from activities such as the sale of the company assets as well as from taking legal action against BOSAI, CLICO (Bahamas) and Caribbean Resources Limited.
These companies owe CLICO (Guyana) some US$50 million with CLICO (Bahamas) owing Guyana US$34 million.
The sale of assets at book value should realize $2.7 billion.

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