THE Insurance Commission (IC) has suspended the operations of pre-need firm Paz Life Plan, Inc. after it failed to comply with the capitalization requirement.
In a statement Thursday, the IC said it has placed the insurer under conservatorship in an April 3 order, banning it from selling memorial plans.
“The result of the examination made into the affairs, financial condition and methods of doing business of Paz Life Plan as of year-end 2016 disclosed that the company failed to comply with the minimum P50 million paid-up capital requirement,” Insurance Commissioner Dennis B. Funa was quoted as saying in the statement.
“Particularly, Paz Life Plan’s paid-up capital amounted to P1.17 million only.”
As a consequence of being placed under conservatorship, Paz Life Plan is prohibited from selling new memorial plans contracts, transferring the administration of the company to the IC-appointed conservator.
In April, Mr. Funa appointed Atty. Raul I. Rafael as its conservator effective June 6.
“[T]he operations of the company will be business as usual under the management of Atty. Raul Rafael except that the company cannot sell new memorial plan contracts,” Mr. Funa explained.
Paz Life Plan has 14,739 planholders as of end-2016.
All memorial plans issued before the conservatorship will remain valid and the obligations of the company to its planholders still exist until expiration, Mr. Funa added.
Under the Republic Act No. 9829 or the Pre-Need Code of the Philippines, pre-need companies selling a single type of plan are required to have a minimum unimpaired paid-up capital of P50 million.
Those selling two or three types of plans are required to have a minimum capital of P75 million and P100 million, respectively.
It is also stated in the law that a conservator is in charge to handle the assets, liabilities and management of the pre-need company, collect all money and debt due to the company and preserve its assets to restore viability.
Mr. Rafael shall report to the IC until such time as the commission is satisfied that the pre-need company can continue to operate on its own.
Paz Life Plan, formerly Paz Memorial Services, Inc., was established in 1969 and was authorized to sell memorial plans La Funeraria Paz, Inc. as its service provider. — Karl Angelo N. Vidal