IC sets moratorium on Prudentialife Plans penalties
MANILA, Philippines - The Insurance Commission (IC) has declared a moratorium on penalties for delayed payments of pre-need plan holders of Prudentialife Plans Inc. (PPI).
Likewise, all claims filed before the Feb. 6 stay order will be serviced.
During the public consultation at the IC grounds yesterday, IC Commissioner Emmanuel Dooc said that a second conservator would be appointed to look into all the corporate assets of PPI and its affiliates.
Dooc said that the moratorium on penalties would give plan holders a reprieve until a rehabilitation plan is decided on and accepted by government and the plan holders.
The PPI and the IC-appointed conservator were the principal crafters of the rehabilitation plan.
The same is true with the payment of claims prior to the stay order issued by the commission, which stops PPI from paying all claims as its trust funds would be depleted and thus render it unable to service future claims after Feb. 6.
Meanwhile, the appointment of a second conservator was deemed necessary by the IC to look at all the assets of PPI and its subsidiaries.
“We have to identify corporate assets of PPI as it will be part of the proposed rehabilitation plan,” Dooc said.
The present conservator, lawyer Rosario Bernaldo, will remain focused on the rehabilitation plan and the trust fund issues.
PPI is a pre-need company servicing over 300,000 plan holders nationwide.
In 2009, PPI was told to stop selling new plans but was allowed to continue servicing existing ones.
However, its trust fund, which was established to create reserves as well as serve as a pool for investments, was depleted.
By September 2011, PPI had a deficit of some P11 billion, meaning it would not be able to pay plan holders in the near future.
Meanwhile, the rehabilitation plan would transfer the pre-need plans to a life insurance company, in this case, Manila Bankers Life Insurance Co. (MB Life).
The plans will be “converted” into life insurance policies under a group life program.
On the other hand, a group of plan holders is suggesting that existing plans be converted into common and/or preferred shares, thus turning plan holders into stockholders.
But they were also proposing a “bridge fund” which the plan holders can draw from.
The Department of Finance meanwhile instructed the IC to resolve the issue by the end of the first semester.