IC halts liquidation process for 6 dormant pre-need firms

MANILA, Philippines — The Insurance Commission (IC) has terminated the liquidation procedure for six pre-need companies which have remained inoperative since their jurisdiction was transferred to the regulator.

In an advisory posted on the IC’s website, Insurance Commissioner Dennis Funa said the liquidation proceedings for Redeemer Life Plan Inc., First Interstate Multiplex Pension Plans Inc., Supreme Educational Plan, Capitol Plans Inc., Savior Life Plan Inc. and Special Plans Inc. have been closed and terminated.

Funa said the IC stopped the proceedings since all liquidation efforts have been exhausted, and these companies have remained dormant since their jurisdiction was transferred from the Securities and Exchange Commission to the IC.

The IC chief, however, noted that only a few planholders have filed their claims against Redeemer Life Plan, Special Plans and Capitol Plans, while no claims have been filed against other companies at all.

He said the termination of proceedings will happen without prejudice to the planholders of these three companies who have not yet received their payment.

Citing its records, the Insurance Commission said the dealer’s license of all the specified pre-need firms had been issued by the SEC between the years 1982 to 2007. Their licenses have not been renewed since then.

By virtue of Republic Act 9829, otherwise known as the Pre-Need Code of the Philippines, effective Jan. 2, 2010, the supervision and regulation of pre-need companies, were transferred from SEC to the IC.

“After uncovering that these companies were ‘in a continuing inability or unwillingness to comply with the requirements of the Pre-Need Code of the Philippines and/or orders of the Commission, this Commission placed said companies under conservatorship on Dec. 29, 2010,” Funa said.

“Since the effectivity of RA 9829, the above-named companies have not filed any notice of intention to renew their licenses. There were no notices from their stockholders or investors of their intention to rehabilitate the companies,” he said.

Subsequently, the IC placed the companies under liquidation on March 20, 2014, upon determining that they were insolvent.

During the liquidation proceedings of these companies, the IC found that the companies’ trust funds were minimal.

“The liquidation values of the pre-need plans issued by these companies are proportionate to the trust fund left available for distribution,” Funa said.

Under RA 9829, pre-need firms selling a single type of plan must have a minimum paid up capital of P50 million, while those selling two types of plans must have P75 million.

Those offering at least three types of plans are required to have a minimum paid-up capital of P100 million.

The law also mandates pre-need companies to set up a trust fund out of their premium collections. This fund is supposed to answer for future delivery of services as provided in the pre-need contracts, and is separate and distinct from the paid-up capital of the company.