Paz Life Plan can no longer sell new memorial plan
The Insurance Commission has placed pre-need 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 disclosed that the company failed to comply with the minimum P50-million paid-up capital requirement. Particularly, Paz Life Plan’s paid-up capital amounted to P1.17 million only,” Insurance Commissioner Dennis B. Funa said in a statement.
“Under the Pre-Need Code, pre-need companies 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 explained.
According to Funa, “The order placing Paz Life Plan under conservatorship came after the company failed to comply with the order of the Insurance Commission to cover up its capital deficiency and to explain why it should not be placed under conservatorship.”
As such, Paz Life Plan can no longer sell new memorial plan contracts.
But Funa clarified that “all memorial plans issued before the conservatorship order remain valid and the obligation of the company towards its planholders still exists until the expiration of their respective plans.”
On its website, Paz Life Plan said that 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 appointed Atty. Raul I. Rafael as conservator to manage the company.
At end-2016, Paz Life Plan had 14,739 planholders. /kga
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