Preneed firm placed under conservatorship
The Insurance Commission has placed preneed firm Paz Life Plan Inc. under conservatorship as it was unable to comply with the capitalization requirement.
“The result of the examination made into the affairs, financial condition and methods of doing business of Paz Life Plan as of end-2016 showed the company had failed to comply with the minimum P50-million paid-up capital requirement,” Insurance Commissioner Dennis B. Funa said, adding that Paz Life Plan’s paid-up capital was only P1.17 million.
“Under the Pre-Need Code, preneed firms existing at the time of the effectivity of the law selling a single type of plan are required to have a minimum unimpaired paid-up capital of P50 million. Those selling two or three types of plans are required to have a minimum paid-up capital of P75 million and P100 million, respectively,” Funa said.
The order placing Paz Life Plan under conservatorship came after the company failed to comply with the order of the Insurance Commission to address the capital deficiency issue and explain why it should not be placed under conservatorship, Funa said.
As such, Paz Life Plan can no longer sell new memorial plan contracts.
But Funa clarified that memorial plans issued before the conservatorship order remained valid and the obligation of the company toward the planholders still existed until the expiration of the plans.
On its website, Paz Life Plan said La Funeraria Paz Inc. was its “premium service provider.”
Formerly Paz Memorial Services Inc., the company’s license was suspended by the regulator through an order issued by Funa in April.
Last month, Funa named lawyer Raul I. Rafael conservator to manage the company.
At end-2016, Paz Life Plan had 14,739 planholders.
