Truly a national insurance ‘scheme’

By Raffique Shah
October 10, 2010

CLICO BailoutNOT surprisingly, many Clico and CIB depositors were not excited over my column of last week. I thought I was being generous to those whose savings now seem to be “jumping up in steelband”. I referred to them as thrifty people. And I, too, would be ticked off if my savings, as small as they are, were threatened through the manipulations of corporate bandits.

I need add that in my years dealing with Clico officials, I have found most of them to be pleasant people. Bear in mind this company was the title sponsor of the local marathon, one of my pet projects, for more than a decade. They were mostly polite, and generous to a fault. I write with authority, as one who gave birth to, and oversaw this event for around 25 years. Sponsors can be crude, and at times, cruel. The organisers run into a bind, through no fault of theirs, and the sponsors simply refuse to breach the financial gap. That can lead to embarrassing situations.

I never encountered such situation with Clico. In fact, I should publicly thank those who made it happen, now that the insurance giant has withdrawn its sponsorship—understandably so. I do not for one moment believe any of them is guilty of foisting on customers a toxic product that stank from the start.

What the hell is a Single Premium Immediate Annuity? Here’s how Clico marketed it: “…life expectancy has lengthened considerably with people living well past their retirement age. This introduces a new risk—outliving your savings. An immediate annuity protects against this.

CLICO’s Single Premium Immediate Annuity guarantees you a lifetime income after retirement, all for a single lump-sum premium investment.”

Clico also promised: “Guaranteed income for the rest of your life; several income payment options in Single and Joint Life plans; and (it) can be used to consolidate an inheritance or windfall into guaranteed income that cannot be outlived.”

Just looking at these “honeyed” projections and promises, they sound too good to be true. So why did so many supposedly intelligent people fall for it? More than that, why did the regulating authority allow the company to market a product that smelled to high heavens…or maybe stank like Hell in decay? I suppose the inquiry the Government intends to pursue may unearth some, if not all, of the facts surrounding this costly misadventure. I do have my reservations, though. So many commissions have gone before, so few reports have been made public, and I don’t know of anyone who has been brought to book based on their findings.

I did promise to address another fancy-footwork financial web that has brought tears to the eyes of too many people. I refer here to the National Insurance Scheme (NIS). I think the operative word here is “scheme”. Let me, again as a layman, explain how contributors suffer from the side-effects of this State-owned and operated scheme.

First, it’s compulsory. Once a person is employed, the employer deducts NIS contributions from his wages or salary. The employer matches it with some additional funds, and pays the total to the NIB. True, the contributions are not big. But because it’s compulsory, the monthly sum paid to the NIB must be huge.

So the NIB collects billions of dollars a year. It invests these in savings, venture capital, and, as we found out recently, even “schemes” like CIB high-interest deposits. The NIB also lends the collected “dues” to corporate clients and through mortgages, earning interest. In 2009, for example, the NIB received $2.55 billion in contributions from around 500,000 employees. One can safely assume that these numbers were steady for the past decade. Its asset base stood at $17.4 billion.

Long-term beneficiaries (presumably pensioners or incapacitated employees) amounted to just over 100,000. The NIS lists 23 benefits, from sickness to pension to death. Last year, following an increase in pension payment to $2,000 a month ($1,000 less than the non-contributory old age pension current payment), the NIB paid out marginally over $2 billion. Bear in mind that sum includes other payments—like sick and death benefits.

To cut a long story short, someone must explain why those who contributed to a compulsory, Government-controlled scheme receive pensions less than those who may never have contributed anything throughout their lives. Even worse, should a person pay well beyond the number of contributions required for pension-qualification, there are no additional benefits.

It gets “wuss dan dat”, as Trinis would say. You contribute all your life, never marry, and die just before you retire. Your siblings or aged parents have nothing to get except a paltry sum to put your corpse down under. Add this many persons who work on a sporadic basis, but who contribute when they do; often, they never get any benefits from the NIB. And when a pensioner dies, his spouse gets a lousy $800 a month. This sucks!

There are many other mini-scams that have permeated the NIS, too numerous to list here. While Calder Hart was chairman up to a few months ago, these scams occurred before his tenure, and continue to this day. “Wuss dan dat”, several trade unionists have served on the NIB Board ever since it came into existence. What have they done to bring some justice to those who laboured all their lives, but who suffer in misery in their winter years?

Answer, comrades, answer!

3 thoughts on “Truly a national insurance ‘scheme’”

  1. I do not think you addressed the worst about the NIS scheme. I trust this blog will give me the opportunity. I do have a case in court against them and I am told I cannot win against them for the Act which they are governed by protects everything they do or say. That is justice for you. Everytime I received NIS injury benefits before my near fatal accident of 2003 I had to turn the cheques over to the company I worked for and had to take money out of my own pocket to take care of my injuries sustained whilst working for the employer. In 2003 whlist nursing an on-the-job injury I was forced to work while I saw a company appointed medical specialist who recommended on going therapy. The company wanted no LTI awards and praises. Meanwhile I was continually drugged by the company doctor who was not interested in evaluating any of my injuries. I was made to feel my pay and job were secure. Of course at the time I was made to feel the company was moving to care for me. I was also continually drugged by the company appointed medical specialist for over one year and this was suddenly stopped and I was told there was nothing more he could do for me. The drugs(mostly pain killers that killed off my nerves) prevented the analysis of my injuries sustained in a near fatal fall at the 200 foot level. Needless to say NIS indicated that for me to receive any benefits I had to suffer work loss. Nevertheless, the company was smart as OHSA laws were also working for them as acting PM, Mr. Errol McLeod revealed recently. Anyway, when I collapsed on the job the following year and applied for NIS benefits, on their NI19 form I learned I had to explained to NIS how I fell, and what my injuries were, not the company doctor who in the first place was not interested in knowing my injuries. After struggling for over 12 months to get the forms filled as interpreted by NIS officers my application for NIS injury benefits was thrown out by NIS. I had to take them to the civil court which I did since 2007. Judgement was reserved in late 2009 and I still wait on a court decision. I complained to the PNM controlled EOC who said there was no discrimination but merely a breach of contract by the company who had refused to fill the NI19 form that I had to get them to fill. NIS eventually came around in late 2007 and gave me a 40 % disability three years after the 2003 accident even though the High Court process which I was forced into via Workmans Compensation order, ruled that I was 60 % PPD, permanently partially disabled. When I protested to the NIS officers they told me they made their own PPD evaluations. This is justice trini style. I wrote letters in July 2010, to six members of the PP cabinet including the AG but I guess I am not important enough to be answered. Perhaps people first, people second, people third do not apply to me…..same ole, same ole.

  2. NIS has to explain to the nation why:

    Someone who is injured on the job cannot receive injury benefits when a company refuses to fill out his NI19 claim form or NIS refuses to force the company to do so with 12 months of his application.

    On questions 17,18,19 why is the injured being asked to fill these questions when the company doctor needs to do this?…implications are the company doctor examines his injuries and support an investigation to establish how and where he was injured and register the witnesses to the accident.

    Why do NIS declare a case is complicated and does nothing to evaluate the complication?

    Why doctors are so fed up with having to address nitpicking by NIS on the filling of their forms re medical section?

    Why does NIS get endless trouble to get particularly foreign companies operating in Trinidad to fill their forms within the required times set by the Act and the claimants are the ones who suffer?

    NIS needs to explain why there is no instructions sheets that would make it easier for anyone to fill their forms?


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