Latest update September 8th, 2024 12:36 AM
Dec 11, 2018 News
By Abena Rockcliffe-Campbell
For years, the Board of Directors of the National Insurance Scheme (NIS) was almost titular. Most, if not all, major decisions concerning the scheme’s finances were made by the People’s Progressive Party/ Civic (PPP/C) at its Cabinet meetings.
This was found during a review of NIS affairs in years prior to the assumption of coalition to administrative office. The review was ordered by the APNU+AFC government.
The findings of that review are contained in a report that is deemed confidential. However, this newspaper was able to secure a glimpse.
One of the major findings is that the PPP/C forced itself on the Scheme and made decisions in violation of the National Insurance Scheme Act.
It was stated that the NIS Board used to be chaired by the Cabinet Secretary to the previous government, Dr. Roger Luncheon, and that none of the members of the Board had any actuarial or insurance background, except for the General Manager.
Further, the document stated that the members had no real say, especially when it came to investments.
The document stated, “In fact, many of the members had served on the Board for many years, but when the minutes of the BODs (Board of Directors) for the last four years were reviewed, they confirmed that critical decisions, in particular those for investments, were made by the Cabinet and not the Board.”
This is starkly in contradiction to the Act that is supposed to govern NIS.
The NIS Act provides guidance on how the Board of Directors should be appointed and regulates its proceedings.
In determining how independent the BODs were, those who carried out the review examined the Act and made several references.
It was pointed out that Section 3 (2) of the Act states: “The Board shall consist of the following members, namely: A Chairman who shall be appointed by the Minister, the General Manager of the board, Ex-officio, who shall be the deputy chairman, seven other members appointed by the Minister from among other persons appearing to him to be qualified of having experience of and shown and shown capacity in, such matters which he considers will be beneficial to the Board.
Then, Section 9 of the NIS Act states, “Subject to the provision of this act, the board has the power to regulate its own proceedings.”
Further, there was a review of the Board minutes for the years 2011 to 2015. During the review, several instances were noted where the Chairman reported Cabinet’s decision, which were accepted.
Even further, the Minutes did not record any discussions, objections or alternatives to these decisions.
Examples were given.
The minutes of the 448th meeting of the Board held on July 20, 2012, recorded that the General Manager informed the Board that Cabinet made a decision for the Scheme to purchase a property in Paramaribo, Suriname for €535,000.
There was no evidence that the Board had deliberated before making this investment nor was there any evidence that a feasibility study was done to determine whether the price paid was consistent with the value of the property.
An appraisal was subsequently done dated 20/12/2013 in which it stated that the voluntary sales value of the property was €670,000.
Also, the minutes of the 445th meeting recorded that the Chairman informed directors that approval was given by Cabinet for the National Industrial and Commercial Investment Limited to sell 950,000 preference shares held in the Berbice Bridge Company Inc to NIS at par value.
It was found that the Cabinet decision was countenanced by Directors. In effect, directors made no attempt to determine whether the investment was in the best interest of the scheme.
Mineral and oil rich country borrowing to feed, clothe and house its citizens.
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