IC puts Prudentialife under receivership

MANILA, Philippines - The Insurance Commission (IC) has placed beleaguered Prudentialife Plans Inc. (PPI) under receivership as it said all proposals to rehabilitate the pre-need firm fail to guarantee best value for planholders.

In an 18-page decision, IC commissioner Emmanuel Dooc said they are designating San Diego, Ycasiano, Macias, Estorco, Castaneda, Sanchez Law Office, represented by Atty. Dionne Sanchez, as interim receiver of PPI.

In the same decision, IC ordered the law office to formulate and implement a receivership plan within 10 days from taking oath.

The receiver is also being tasked to determine whether the company can still be revived within 30 days.

If no rehabilitation plan, which may include the entry of new shareholders who are willing to infuse new capital into the company, is formulated within the one-month period, the liquidation process will then proceed, according to the IC.

The liquidator will have to form a board of advisers composed of planholders (with at least one representative each from Luzon, Visayas and Mindanao); PPI corporate creditors; private consultant (to be appointed by PPI) and ex officio representative from IC.

Once the receivership starts, the IC said PPI would also be ordered to desist from transacting further business.

In Sept. 13, 2010, the IC declared PPI under conservatorship, which took charge of the assets, liabilities and management of the company. The conservator was appointed to report to the IC to determine if the pre-need company can continue to operate on its own.

Since late 2011, various proposals for the rehabilitation of PPI were being considered. These proposals came form the Batiles Group, Loyola Plans Consolidated Inc., and Abundance Providers and Entrepreneurs Corp.

After careful evaluation, the IC said all the proposals for PPI failed to guarantee the safety of placeholders.

“We find that the proposals are not exhaustive enough and fail to guarantee the best value of the benefits that can be given to the planholders. The proposals also fail to satisfy the requirements of the law,” the IC said.

IC also pointed out that “since there is no clear intention on the part of the stockholders of PPI to infuse additional capital or to submit infusion plan to cure the company’s huge financial deficiencies, it is now very clear that PPI will remain insolvent.”

The 34-year old PPI has 300,000 planholders nationwide.

In 2009, PPI was told to stop selling new plans but was allowed to continue servicing existing ones.

As of September 2011, PPI had a deficit of some P11 billion.