Govt, NIS sign GYD$5 billion deal to defray losses in failed CLICO

Last Updated on Friday, 16 September 2016, 18:25 by Denis Chabrol

The Guyana government and the National Insurance Scheme on Friday inked an agreement to re-capitalise the cash-strapped social security institution , the National Insurance Scheme (NIS), which had invested in the now failed Colonial Life Insurance Company (CLICO).

The first payment of $317,359,002.94 will be made to NIS in January 2017.

Finance Minister, Winston Jordan signed an Agreement with the National Insurance Scheme (NIS) for an aggregated value of GYD$5,651,431,475.34.

“This agreement is in keeping with the Parliamentary Resolution 82 of 2009 and the Government’s commitment to assist the NIS to recover its investment in the Colonial Life Insurance Company (Guyana) Limited (CLICO),” the Ministry of Finance said in a statement.

At February 28, 2009, CLICO’s liability to the NIS amounted to $5,482,446,199.00 for thirteen (13) Executive Flexible Premium Annuity (EFPA) Policies with maturity over the period 2009 to 2012.

The Finance Ministry explained that in an effort to prevent the loss of benefits to the NIS contributors and beneficiaries, Parliament approved Resolution No.82 of 2009, dated March 12, 2009 which called upon the then Government to secure the investments made in CLICO by the NIS.

Subsequent to Resolution 82 of 2009, on September 10, 2010, CLICO was placed into liquidation by the High Court. On November 22, 2011, in keeping with the Government’s decision, the Camp Street CLICO Building was transferred to the NIS at a cost of $600 million, thereby reducing the reconciled amount to $4,882,446,199.00.

By way of a Cabinet decision, approval was granted for the Government to make payments to the NIS through the issuance of twenty (20) Non-negotiable Debentures, to be redeemed annually over a period of twenty (20) years, at a fixed interest rate of 1.5 percent per annum.