Eternal Plans placed under conservatorship

MANILA, Philippines — The Insurance Commission (IC) has placed pre-need provider Eternal Plans Inc. (EPI) under conservatorship for its failure to deliver the backlog in its trust fund.

The IC yesterday said it ordered EPI to undergo conservatorship after failing to fill its cash deficiency for its 2018 trust fund as mandated by the Pre-need Code.

IC commissioner Dennis Funa said EPI showed its inability or unwillingness to comply with the regulator’s instructions, warranting the issuance of a conservatorship order against the firm in January.

Funa named John Apatan, division manager of the IC’s Conservatorship, Receivership and Liquidation Division, as ex-officio conservator for EPI. Apatan will manage all assets and liabilities owned by EPI in an effort to restore it to financial viability.

As ex-officio conservator, Apatan can also collect all payments and debts due to the pre-need provider as stated under Section 49 of the Pre-need Code. Likewise, he can authorize a reorganization of EPI’s management with the objective of preserving its assets.

After placing EPI under conservatorship, Funa said the firm sought for regulatory reprieve with an additional request to go through rehabilitation.

“We find this request consistent with the regime of conservatorship [and], hence, the case of the company falls under the conservatorship process under the Insurance Code,” Funa said.

The IC chief also said the agency received no other correspondence and submission from EPI, and that the trust fund remains deficient despite the government order to infuse it with cash.

In November 2021, the IC ordered EPI to replenish its trust fund with cash. After requesting for an extension, the firm was granted until Dec. 28, 2021 to comply with the directive.

As the deadline approached, the IC reminded EPI that its previous non-cash contributions were approved on the condition that it sells such assets within a year or replace them with cash after a given period. Funa said the Pre-need Code requires that all deposits put in trust funds come in the form of cash.

Based on its latest financial statements, EPI posted a net income of P33.72 million in 2018 to reverse a net loss of P18.46 million the prior year.

However, the firm’s net worth at that time only stood at P55.81 million – the lowest in a group of pre-need providers offering three kinds of plans – as its liabilities nearly matched its assets.