MANILA, Philippines — The Insurance Commission (IC) is investigating a pre-need firm for allegedly submitting fake documents, giving rise to questions over the company’s compliance with the industry’s capitalization requirement.
In a statement, Insurance Commissioner Dennis Funa said the regulator has issued a show cause order against Prime Care Kaagapay Life Plan Inc. after the company submitted a spurious bank certificate when it applied for renewal of its license.
This was verified by the bank manager of the firm’s depository bank.
“Upon investigation, it was discovered that Prime Care Kaagapay has submitted bank certifications to the commission bearing the same serial number pertaining to the same account but with different amount of available balances,” Funa said.
“Upon verification with the depository bank of Prime Care Kaagapay, it was revealed that the bank certification, which was supposed to prove that it has the required P100 million minimum capitalization under the Pre-Need Code, was spurious,” he said.
Under Republic Act 9829, a pre-need company should have a minimum paid-up capital of P100 million.
The submission of a bank certification is crucial in determining the financial strength of a company, serving as proof that it possesses the required capital for pre-need firms.
According to the IC chief, the authentic bank certification of the company’s account showed that its outstanding balance was below the minimum required paid-up capital for new pre-need companies.
“Upon further verification, it was likewise discovered that the said bank account has already been closed,” he said.
Due to its violation of the Pre-Need Code, Funa said the IC also issued a conservatorship order against Prime Care Kaagapay.
This enables the regulator to take over the assets of the company to ensure that the company’s assets will be used solely for legitimate business purposes.
In addition, Funa said IC is looking into all possible cases, both administrative and criminal, against the responsible officers of Prime Care Kaagapay in relation to its misrepresentation and submission of fake documents.
“While we cannot disclose the details of the ongoing investigation until its completion, we assure the public that we are carefully looking into all possible violations of the responsible officers and hold them liable,” he said.
Prime Care Kaagapay applied for a license to sell memorial plans in 2018. It is headed by its chairperson Moryula Geru Oliveros, and president and chief executive officer Pio Gubatana.