MANILA, Philippines - Prudentialife Plans Inc. (PPI) said yesterday it will continue to operate despite a stay order issued by the Insurance Commission effective Feb. 6, 2012.
PPI’s offices and branches nationwide remain open to attend to planholders concerns,” PPI president Jose Alberto Alba said.
He explained that the notice is the start of a legal process under the New Pre-need Code in response to PPI’s petition for corporate rehabilitation filed with the Insurance Commission on Dec. 9, 2011. The company is seeking an orderly restructuring of its contractual obligations to ensure the continued protection of its pre-need planholders.
For the past three years, PPI held several dialogues with the Securities and Exchange Commission and the Insurance Commission to find ways of addressing its trust fund deficiency.
Alba said that Prudentialife was not sheltered from the economic slowdown that resulted in corporate downturns and financial losses for many industries in 2008. “The trust fund for pre-need plans intended to cover benefits are not generating the projected returns and can no longer match the increase in maturing obligations particularly for the education and pension plans”.
PPI’s license to sell pre-need plans was revoked on April 20, 2009 and this prevented the company from operating normally thereby worsening its financial condition. Nevertheless, Prudentialife continued as a servicing company, implementing ways and means to prevent further losses; at the same time, it kept on paying planholders benefits up to the time that the stay order was issued.
Public hearings have been scheduled in March to discuss proposed solutions to preserve trust fund assets particularly of the education and pension plans to provide protection to the remaining PPI planholders.