IC suspends Paz Life Plan operations.
The Insurance Commission (IC) has suspended the operations of Paz Life Plan Inc., previously Paz Memorial Services Inc., for failing to comply with the minimum capital requirement for pre-need companies.
In an order dated April 3, Insurance commissioner Dennis Funa placed Paz Life Plan under conservatorship effective today and appointed Raul Rafael as conservator.
Funa said the regulator came up with this decision following the assessment of the company's financial condition, which found that Paz Life's paid up capital was way below industry requirement.
He said the IC gave the company a chance to cover up its capital deficiency and explain why it should not be put under conservatorship, but it still failed to comply.
'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, 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 P75 million and P100 million, respectively.
Now under conservatorship, Paz Life Plan is already prohibited from selling new memorial plan contracts.
However, Funa clarified that all memorial plans issued by the company before the conservatorship order remains valid. He added the obligation of the company towards its planholders still exists until the expiration of their respective plans.
According to the IC chief, the management of the Paz Life Plan is also transferred to the appointed conservator, Raul Rafael.
As conservator, Rafael is tasked to take charge of the assets, liabilities, and the management of the company, to collect all moneys and debts due the company, and to exercise all power necessary to preserve the assets of the company and to restore its viability.
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|Publication:||Philippines Star (Manila, Philippines)|
|Date:||Jul 6, 2018|
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