Wed | Jul 18, 2018

Guyana to refund NIS for CLICO losses

Published:Wednesday | August 10, 2016 | 12:00 AM

The Guyana government says it will repay to the National Insurance Scheme (NIS) an estimated GUY$5.6 billion lost by the pension as a result of the 2009 collapse of Colonial Life Insurance Company (CLICO), a regional operation based in Trinidad.

Finance Minister Winston Jordan told a news conference on Monday the Cabinet had agreed to replace the funds through non-negotiable government debentures over a 20-year period at a fixed interest rate of 1.5 per cent on the principal sum of GUY$4.8 billion.

Jordan said the possibility of NIS recouping the money owed by CLICO was highly unlikely.

"NIS investment in CLICO is impaired, with extreme unlikelihood of getting back that money. As a result of that impairment, NIS, as you know, has been suffering terribly, and not only NIS but the beneficiaries in NIS are suffering terribly because their ability to raise benefits will obviously be constrained by the fact that they don't have this money and this money cannot be put to earn additional monies for them," he said.

He said a 2009 parliamentary resolution had urged the government to do what it must to get back the money.

Jordan did not say why litigation against CLICO was not pursued. The option chosen by Guyana is "the best the government could do at the moment but it is substantially more than what NIS would have had if this investment continues to be impaired", he said.

Payments will begin in January 2017. Calculations show that the NIS would have received a total of GYD$5.651 billion by year 2037.