Biz Buzz: When insurers don’t pay up
Five insurance firms have been haled to court for refusing to pay the balance of the insurance claim of Steel Corporation of the Philippines for a fire that destroyed part of its $216-million cold rolling steel manufacturing facility in Balayan, Batangas in 2009.
An international panel of experts concluded that the fire was accidental and material damages amounted to $33.8 million, while business interruption losses amounted to $8 million.
More importantly, representatives of an international forensics team and officials of the insurance firms in question conducted an ocular inspection of the fire scene a few days after the incident and determined that no foul play occurred leading to the fire (as is the usual suspected motive in fires that hit industrial facilities or commercial establishments).
Standard Insurance Co. Inc., a member of the consortium that insured the facility, paid its share of $5.025 million, effectively validating SCP’s claims.
Now the ball is in the court of the other consortium members as to whether to dig in their heels and tough it out, or take the more conventional route of paying up—something which would save the insurance industry a lot of headaches and embarrassment, if the SCP side is to be believed. These consortium members, according to court documents, claimed they were still awaiting certain documents from SCP before making a decision on whether or not to pay.
June, of course, is the month when insurance companies renew their licenses to operate in the Philippines with the Insurance Commission (IC). Perhaps IC should take a close look at the case of SCP over its insurance claims for the fire that damaged its Batangas plant. In particular, these five insurance firms in question have yet to settle their obligations to the insured party after almost six years.
If these recalcitrant insurers can do this to a large firm like SCP, what can small- and medium-sized enterprises expect from their own insurance firms in times of need?
Calling the Insurance Commissioner. Daxim L. Lucas
Algae alert
AS IF threats of a dryspell are not enough, some parts of the metropolis have suffered a deterioration in water quality. The culprit? There’s rising concentration of algae in Laguna Lake, source of some of Maynilad Water Services Inc.’s raw water supply.
In an advisory dated June 17, Maynilad reported to customers that algae concentration in Laguna Lake had increased further from 400 tc/mL (a measure of microscopic algea biomass) to an unprecedented high of 4,000 tc/mL, adding that the average concentration of algae was only 200 tc/mL. Maynilad said this resulted in a recurrence of the “unusual” taste and odor in its water supply despite the systems adjustments implemented since June 8.
Maynilad had to apologize to its customers although the Laguna Lake situation was something beyond its control.
Among the affected communities are those located in southern Metro Manila, including Ayala Alabang village, which (as we earlier reported in this space) was also preoccupied with an internal debate on whether to open up a new gate to ease traffic congestion. We now hear of families using bottled or rationed water even for brushing their teeth to avoid contracting diseases. Imagine yellowish water flowing into your bath tub or, worse, being infected with amoebiasis.
“We have thus intensified our on-site chlorination and flushing activities,” Maynilad said, adding that a new biological activated filtration (BAF) system in its Putatan water treatment facility should provide a permanent solution to the algea problem. But since it was only last June 1 that this additional treatment process was commissioned, Maynilad said the effect would not be fully felt until July when the system would have been completely operational.
As an interim measure, Maynilad said it had further reduced its water production to allow longer treatment of raw water through the BAF. “This initiative has been effective so far, as we now have fewer reports of water quality issues compared to the previous days,” the Maynilad advisory said.
Customers affected by the scheduled water interruptions due to the reduced water production of Putatan are advised to request Maynilad for water tanker delivery.
Meanwhile, this is not an issue for consumers serviced by the other concessionaire Manila Water Co., which does not extract water from Laguna Lake. Now we wonder what the government is doing to address the root cause of this problem. Doris Dumlao-Abadilla
TSC at SharePHIL summit
The Shareholders Association of the Philippines (SharePHIL)—a group that aims to promote the rights of minority shareholders in publicly listed firms—has convinced the head of the one of the country’s biggest conglomerates to deliver a keynote address at its annual “summit” scheduled for next Wednesday, June 24, at the Dusit Thani Hotel in Makati City.
Indeed, BDO Unibank chair and SM Investments Corp. vice chair Teresita Sy-Coson will speak before the group about “breaking the barriers of international markets,” along with other officials such as Finance Secretary Cesar Purisima and the Asian Corporate Governance Council’s Chris Leahy who will also speak on related topics.
Sy-Coson, of course, carefully screens and selects which invitations to speaking engagements she will accept, so the fact that she agreed to speak before a relatively young organization like SharePHIL is something of a coup for its president, Accra lawyer Francis Lim.
Leahy, meanwhile, is expected to tell the group how the Philippines is faring vis-a-vis its Asian counterparts in the aspect of corporate governance and what can be done to improve the country’s rating.
Based on the group’s latest edition of the Corporate Governance Watch, the Philippines is a cellar dweller, sadly. Daxim L. Lucas
E-mail us at [email protected]. Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert)
