IC puts Loyola Plans on conservatorship.
THE Insurance Commission (IC) has placed Loyola Plans Inc. under conservatorship, with the company unable to comply with the minimum unimpaired paid-up capital and trust fund requirements.
In a statement issued on Sunday, Insurance Commissioner Dennis B. Funa ordered the placing of Loyola Plans Inc. pointed to the company's continuing inability to cover its capital and trust fund deficiencies required of preneed companies under Republic Act (RA) 9829 or the Preneed Code of the Philippines.
'Loyola's inability to cover up its paid-up capital impairment amounting to P126 million and trust fund deficiency in the amount of P149 million based on its 2016 Audited Financial Statements as of December 31, 2016, is one of the grounds for placing the company under conservatorship,' Funa said. According to the IC, the company has a negative net worth based on the verification of its 2016 Annual Financial Statements, with its paid-up capital found to be impaired by P126 million.
The company's trust fund, on the other hand, is only P932 million as against its total preneed reserves (liability) of P1.48 billion.
Preneed companies are required by law to set up a trust fund out of their premium collections, to answer for future delivery of services as provided in the preneed contracts, which is separate and distinct from the paid-up capital of the company.
In 2018, the IC called the attention of Loyola Plans Inc. directing it to cover its provisional capital and trust fund deficiencies based on the 2016 Annual Statement of the company.
Funa said the company has yet to submit its 2017 and 2018 Annual Financial Statements despite issuance of a show-cause order.
'At that time, the deficiencies were still considered provisional as the company only submitted its 2016 Annual Statement. It had failed to submit its 2016 Audited Financial Statements within the deadline provided under the Pre-Need. Code despite repeated orders and issuance of show-cause orders issued by the IC. Despite being provisional, the IC already required them to address these deficiencies,' he added.
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|Publication:||Business Mirror (Makati City, Philippines)|
|Date:||Jul 29, 2019|
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