The Insurance Commission asked the Bangko Sentral ng Pilipinas to investigate the alleged gross negligence of United Coconut Planters Bank in managing the trust fund deposits of Provident Plans International Corp.
Insurance commissioner Dennis Funa said over the weekend the regulator sought the assistance of Bangko Sentral to conduct a fact-finding investigation on UCPB over the alleged commission or omission of acts required of the bank as a trustee of Provident Plans.
“The IC wrote a letter to BSP Governor Nestor Espenilla Jr., requesting that a fact-finding investigation be conducted on UCPB in connection with the handling of the trust fund deposits of Provident Plans,” Funa said.
“This request was prompted by the letter from Siguion Reyna Montecillo & Ongsiako Law Offices, counsel of Provident Plans, to the IC alleging that UCPB committed gross negligence and fraudulent mismanagement of Provident Plans’ Trust Fund Deposits which resulted in the impairment of the required capital and deficiency in required trust fund of the said pre-need company,” Funa said.
UCPB earlier denied being negligent in protecting the trust fund of Provident Plans which the Insurance Commission planned to put under conservatorship to protect the interest of plan holders.
UCPB said in a statement it was coordinating with the Finance Department to clarify the matter. It said as Provident Plan’s trustee bank from 1989 until 2014, it “had never been negligent in protecting their trust fund.”
UCPB said in 2009, Provident Plans decided to terminate its trust agreement with EIB and transferred the EIB time deposits to UCPB. “At the time it was transferred to UCPB, the EIB time deposits were considered as an allowable investment under the SEC guidelines and IC regulations. EIB was eventually shuttered by the BSP in 2012,” it said.
Funa said upon evaluation of Provident Plans’ request, the commission deemed it proper to refer the same to Bangko Sentral, considering that the regulatory and supervisory powers over UCPB was vested upon it.
“Nevertheless, we required UCPB to submit to us their reply on the allegations of Provident Plans,” Funa said.
Provident Plans is among the companies that the Insurance Commission found to be financially deficient after the regulation of the pre-need industry was placed under the commission in 2010 pursuant to Republic Act 9829. Pre-need firms were previously under the supervision of the Securities and Exchange Commission.
Based on the latest letter submitted by Provident Plans to Insurance Commission, Provident Plans was in the process of negotiating with new investors who would either acquire or invest in the company in addition to raising new funds as part of its capital build-up program.