IC places CHSI subsidiary Caritas Financial Plans under receivership
THE INSURANCE COMMISSION (IC) has placed pre-need firm Caritas Financial Plans, Inc. (CFPI) under receivership and issued a stay order due to the company’s inability to pay its obligations.
The IC, in a directive dated April 25 and posted on its website on Thursday, placed CFPI under receivership and suspended all payments of claims via the stay order.
The order was issued “in order to consolidate, preserve, and protect the assets of the company for the benefit of the planholders and creditors while undergoing receivership proceedings,” the IC said in a notice to the public.
“CFPI is suffering from liquidity problems, which resulted in continuous delay and difficulty in paying all its obligations,” it added.
The directive comes almost nine months after the pre-need firm was placed by the IC under conservatorship in August 2023, which stopped it from doing business as it was unable to comply with regulatory requirements due to its parent firm health maintenance organization Caritas Health Shield, Inc.’s (CHSI) ongoing financial woes.
“During the period of conservatorship, CFPI was allowed to accept subsequent payments from existing plans alongside with the processing of all claims and benefits of its planholders,” the IC said in the directive.
“However, immediately after placing the company under [conservatorship], it was discovered that CFPI is already suffering delays in the payment of plan termination and other planholders’ claims. Given this, the designated conservator ordered the company to reconcile its disbursement account to properly account all its outstanding obligations with its planholders,” it added.
The regulator said the company also remains non-compliant with its capital and trust fund requirements.
CFPI had a capital deficiency of P118.685 million and a trust fund deficiency of P36.196 million as of Dec. 31, 2023, based on its unaudited financial statements, the IC said.
It had assets worth P1.146 billion and liabilities amounting to P1.206 billion as of end-2023, it added.
CFPI’s parent firm CHSI has been under receivership and a similar stay order since Aug. 1, 2023 due to its inability to comply with the IC’s solvency requirements, as the company had a net worth deficiency of P6.48 billion as of 2018.
CHSI’s other subsidiary, life insurer Caritas Life Insurance Corp., has been under conservatorship since the same date and was likewise told to cease and desist from conducting business.
