The Insurance Commission on Monday threatened to shut down Provident Plans International Corp., a pre-need company led by businessman Gregorio Alcantara Jr., unless the company finds a white knight on or before June 17.
Insurance commissioner Dennis Funa said in a report to Finance Secretary Carlos Dominguez III the agency planned to put Provident Plans under conservatorship to protect the interest of 38,000 plan holders.
Provident Plans is among the companies found to be financially deficient after the regulation of the pre-need industry was placed under the commission in 2010 under Republic Act 9829. Pre-need firms were previously under the supervision of the Securities and Exchange Commission.
Funa said while Provident Plans manifested before the IC in February and March this year that it had a “white knight” investor to cover up its capital impairment and trust fund deficiencies, the regulator had not yet received any concrete plan or letter of intent from the supposed investor.
“Thus, this commission has ordered Provident Plans to submit a concrete plan and letter of intent from its proposed investor or to cover up its capital impairment and trust fund deficiencies within 60 days from receipt of the directive (dated April 12, 2017) or until June 17, 2017. Otherwise, this commission will issue a cease and desist order and place the company under conservatorship,” Funa said.
Provident Plans has three product lines focused on life/memorial plans, education plans and pension plans, but 70 percent of its clientele were life/memorial policy holders.
Funa said Provident Plans’ financial woes were already existing before the enactment of the Pre-Need Code and the transfer of supervision of pre-need companies to the IC.
It said the primary cause of the company’s capital impairment and trust fund deficiency was the unrecoverable investment with its previous trustee bank―the Export and Industry and the neglect by its new trustee bank―United Coconut Planters Bank to protect. the trust fund.
The commission said it had given Provident Plans sufficient time and opportunity to infuse cash and/or additional assets to address its financial problems, which it had failed to do.
“The IC needs to protect the interest of Provident Plans’ policy holders as it cannot allow the company to continue to operate under its present condition,” it said.