IC places Paz Life Plan under conservatorship.
THE Insurance Commission (IC) has suspended the operations of preneed company Paz Life Plan Inc., citing its inability to comply with the minimum capital requirement for the sector.
Insurance Commissioner Dennis B. Funa ordered the placing of Paz Life Plan under conservatorship and appointed Raul I. Rafael, a lawyer, as the conservator effective June 2018. The regulator said the company could not comply with the minimum capitalization required of preneed companies in the country under the Pre-need Code of the Philippines, or Republic Act 9829.
'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. Particularly, Paz Life Plan's paid-up capital amounted to P1.17 million only,' Funa said.
Under the Pre-Need Code, preneed companies existing at the time of the effectivity of the law 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 paid-up capital of P75 million and P100 million, respectively.
The IC said the order placing Paz Life Plan under conservatorship was issued after the company failed to comply with its instruction to cover the capital deficiency and to explain why it should not be placed under conservatorship.
Paz Life Plan is now prohibited from selling new memorial plan contracts, while the management of the company is transferred to the IC-appointed conservator.
'In view of the conservatorship order issued against Paz Life Plan, the operations of the company will be business as usual under the management of Attoryney Rafael except that the company cannot sell new memorial-plan contracts,' he added.
Meanwhile, all memorial plans issued before the conservatorship order of the IC remain valid, and the obligation of the company toward its plan holders still exists until the expiration of their respective plans.
An IC-appointed conservator shall report to the commission until such time as the regulator is satisfied that the preneed company can continue to operate again on its own.
Paz Life Plan was established in 1969 and was authorized to sell memorial plans with La Funeraria Paz Inc. as its service provider. As of December 2016, Paz Life Plan had 14,739 plan holders.