…Hand in Hand Trust could lose US$6M to StanfordColonial Life Insurance Company (CLICO) Guyana sold its shares in the Berbice River Bridge for $2B to New Building Society a mere two weeks ago.The move came as depositors were making a rush to collect their money from CLICO (Guyana) following reports that the parent company, CL Financial, as well as the various CLICO assets in the Caribbean were being frozen or divested.The problem of liquidity thus forced CLICO Guyana to move to dispose of some of its short-term assets to satisfy the need for immediate cash.Local withdrawals over the past two weeks amount to about $1.4B to policy holders.During a press conference, yesterday, President Bharrat Jagdeo announced that the local company had shown considerable exposure to CLICO (Bahamas).He added that despite instructions from Commissioner of Insurance, Maria Van Beek,Wholesale Cheap Jerseys, to the company over a year ago and more recently to reduce this exposure, CLICO Guyana failed to heed the warning. This reduced exposure did not happen.President Bharrat Jagdeo along with Minister of Finance, Ashni Singh, Bank of Guyana Governor,China Jerseys Cheap, David Lawrence and Commissioner of Insurance, Maria Van Beek yesterday CLICO Guyana invested $6.9 billion in CLICO Bahamas. Subsequent to this,nfl jerseys china, he added, the local company began to experience sizable claims,Cheap Jerseys, which resulted in ‘liquidity strains’, thus it began to dispose of some of its investments.The Head of State added that although the investments held in CLICO (Bahamas) were liquid on paper, investigations by the authorities revealed that the Bahamas company was exposed to real estate investments in Florida through related party transactions with other subsidiaries in the Group.On Tuesday last, in a press release, the Office of the Registrar of Insurance Companies in Bahamas cited the inability of CLICO (Bahamas) to pay claims/surrenders of policies in one of the jurisdictions where it operates. There were other concerns.CLICO (Guyana) has $6.9 B (US$34M), he added, invested in CLICO (Bahamas), which represents 53 percent of the Guyana company’s total assets.CLICO (Guyana), the President added, has not been able to exchange its illiquid assets for more suitable investments despite repeated instructions by the Government of Guyana to do so.Given the action taken by the Bahamian regulators, President Jagdeo said, as well as the significant exposure that the local company has to CLICO (Bahamas),Jerseys NFL Cheap, the local authorities on Wednesday moved immediately to the courts to seek a judicial manager in order to protect the best interests of Guyana’s policyholders.With this move, it is anticipated that a fuller assessment of the financial position of the Company will be obtained and greater protection would be offered to policyholders,Wholesale Jerseys Authentic, he added.He noted that the administration intends to work towards recovering the sums outstanding from the Bahamas, and to protect the interests of all policyholders of CLICO (Guyana).Hand-in-Hand GroupAnd the Hand-in-Hand Trust Corporation Inc. (HIHT) total current exposure to the Stanford Group amounts to $827M or US$4M, in addition to $297M or US$1.5M invested on behalf of pension funds.The direct exposure represents nine percent of the total assets of Hand-in-Hand Trust Corporation Inc, the President said.“The Trust is a strong financial institution with capital adequacy ratio of 26.9 percent as at the end of January 2009.”Since the seizure of the Stanford Investment Bank, the management of HIHT has been proactive in putting together a strategy for mitigating any potential losses and ensuring that depositors’ funds are protected, he said.“This strategy has been submitted to the Central Bank for its study and approval. The Central Bank is examining the proposal to see if it meets the demand of depositor protection.”It should also be emphasized, the Head of State said, that the Hand-in-Hand Trust Inc is a completely separate legal entity from the Hand in Hand insurance companies which have no exposure to these developments.GUYANA’S FINANCIAL SYSTEMAgainst this background, the total exposure of the Guyana’s financial system to the CLICO and Stanford Groups currently amounts to approximately US$41M.This amounts to three percent of the total assets of the financial sector and does not pose a systemic threat. “I wish to assure the public that, unlike in some developed countries, steps will be taken to protect the pensions of those who have saved and invested in the institutions affected by these recent events.”The local f