Provident Plans seen deficient
The Department of Finance on Monday said the insurance regulator may place pre-need company Provident Plans International Corp. under conservatorship due to its poor financial state.
In a statement Monday, the DOF said Insurance Commissioner Dennis B. Fund reported to Finance Secretary Carlos G. Dominguez III that “while Provident Plans manifested before the IC (Insurance Commission) in February and March this year that it has a ‘white knight’ investor to cover up its capital impairment and trust fund deficiencies, [the regulator] has yet to receive any concrete plan or letter of intent from this supposed investor.”
“Thus, [the IC] 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, or until June 17. Otherwise, [the IC] will issue a cease and desist order and place the company under conservatorship,” Funa told Dominguez.
Based on the IC’s assessment, Provident Fund had P340.61 million in capital impairment on top of P284 million in trust fund deficiency as of December last year, the DOF said.
The DOF quoted the IC as claiming that “the primary cause of [Provident Plans’] capital impairment and trust fund deficiency is the unrecoverable investment with its previous trustee bank, the Export and Industry (EIB), and the neglect by its new trustee bank, the United Coconut Planters Bank (UCPB), in protecting the trust fund.”
“The primary reason behind these deficiencies was the ‘disallowance of the unrecoverable/unqualified trust fund investment made by EIB as a trustee bank of Provident Plans, in its own bank in the form of time deposits in 2005,’” Funa explained.
EIB was ordered closed and placed under receivership by the Bangko Sentral ng Pilipinas in 2012 over its failure to meet its maturing obligations, insufficient realizable assets and its inability to continue business without inflicting losses on its depositors and creditors, Funa noted.
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