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Turmoil in Insurance Business – Inner-Governmental Knockout

February 8, 2011
Darejan Paatashvili, Interpresnews

After the Chamber of Control made a scandalous conclusion on the insurance companies and expressed anxiety about the activities of those companies, a political question was asked – what is going on in the government? It is the fact that the government attacked the scheme which was created by them, though they did not admit the mistake?

Unfortunately nobody believes that the Chamber of Control unilaterally decided to publish the conclusion about the insurance companies – these types of things do not usually happen in the case of elite corruption. Besides that, before the scandalous conclusion the president of Georgia superficially rebuked the insurance companies for a high percentage of profit. In other words- earning money at the expense of the welfare of the population failed.

The opposition does not buy into the regret of the government. “The Minister of Justice attacked the Minister of Internal Affairs,” the opposition members allege. So, it is a pity that unless somebody desires to attack another official, the government will never tell the truth about violations.

We will learn only at the end of all the processes whether the government was sorry for the wasted money or whether this scandal came to light merely because of inner-governmental controversy. The process will start soon and it will not finish without controversy; the parliamentary opposition started speaking about it and they allege that the financial police started working at the insurance companies and in the near future we will hear several confessions on TV. Some people will be detained, then somebody will blame another person and the population will remain happy – the people who wasted their welfare were punished. However, it will be useless to inquire who in fact was punished– the real offender or somebody was sacrificed on behalf of this misunderstanding. Meanwhile, the elections  approach us…

The opposition parties claim that the elections are directly connected with the scandal of insurance companies and they add that the government created a closed space on purpose – pharmacy, insurance company and hospital. They funded this space and received the money back- though they put the money in their pockets and not in the budget. “In a similar case, Adeishvili blocks the most serious source of “funding” for Merabishvili and his clan,” the opposition members allege.

The opposition simply saw the trace of the controversy between Merabishvili-Adeishvili in this turmoil. The head of the Chamber of Control Levan Bezhashvili is close to Zurab Adeishvili and does not do anything without consulting with him; furthermore, the president was also informed about his plans. The Deputy Minister of Health, Labor and Social Welfare Irakli Giorgobiani is in charge of the insurance companies. He is close to Vano Merabishvili (Giorgobiani is a witness of the scandal between former Defense Minister Irakli Okruashvili and the head of the Constitutional Security Department Data Akhalaia).

Former health minister and current rector of Tbilisi State University Sandro Kvitashvili might be involved in the insurance scandal. Rumor’s within political circles suggest that the authority started to dislike Kvitashvili after he failed the insurance competition after he arrived from the USA and prevented the transfer of an additional 30 million GEL to the insurance companies. Kvitashvili’s fate depends on the results of the inner-governmental knockout.

As for the figures, according  data from the Chamber of Control, in 2008-2010 company the Archimedes Global Georgia insurance company received a bonus of 10, 961, 514 GEL and their profit was 58. 98 %. Inthe same report period the bonus received by Aldagi BCI was  29, 733, 947 GEL with a profit of 65.48 %; GPI Holding received a bonus of 60, 056, 756 GEL and their profit was 57. 38 %. For the last two years, the IC Group received a bonus of  34, 721, 138 GEL and their profit was 77.32 %; Imedi L received 66, 658, 874 GEL in 2008-2010 and their profit was 55.79 %; the Insurance Company Irao (in which the brother of the president owns 51 %) brought home a bonus of 40, 134, 478 GEL and their profit was  51.07 %, and the “Kartu” company received a bonus of 3, 303, 621 GEL and they had the least profit – 27.16 %.

Insurance companies spent only 40 % of the 284 million GEL on the population. The profit of the companies exceeded 60% while the profit of private insurance companies was only 4%.

“In 2008-2010, only 171, 000 cases of 808, 000 citizens insured in the framework of the program for impoverished people were funded by insurance companies; that means only 21% enjoyed their service. At the expense of the neglected interests of the state, medical personnel and program beneficiaries, the insurance companies received profits of 170 million GEL,” statement by the Chamber of Control which sounded very scandalous though they could do it in a moderate tone too. Because of this rude tone nobody believes that the Chamber of Control opposed the government.

The parliamentary opposition cannot predict the end of the scandal. However, they say that on the one hand the government avoids unreasonable expenditure of an additional 300 million GEL and on the other hand they create problems for the party cash-desk of the National Movement. And it is very confusing that the members of the National Movement create problems for their bank. Supposedly, pre-election turmoil has started and similar inner-governmental knockouts will still occur before the next elections.

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