IC issues show cause order vs Prime Care Kaagapay

The Insurance Commission (IC) is investigating pre-need firm Prime Care Kaagapay Life Plan Inc. for alleged fraud for submitting spurious documents to prove its financial viability to the regulator.

In a statement Friday, the IC said the show-cause order issued against the Prime Care Kaagapay came on the back of alleged “suspicious” and “fraudulent” bank documents the company had submitted to have its license renewed.

“Upon investigation, it was discovered that Prime Care Kaagapay has submitted bank certifications to the IC bearing the same serial number pertaining to the same account but with different amount of available balances,” Insurance Commissioner Dennis B. Funa explained.

“The submission of bank certifications is extremely crucial in serving as proof that a company possesses the required capitalization under the Pre-Need Code,” Funa noted.

At present, pre-need companies must have a minimum P100-million paid-up capital to secure a license from the IC.

Funa said the bank certificates submitted by Prime Care Kaagapay were flagged as “spurious” by the bank manager of the firm’s depository bank.

“Based on the certification issued by the depository bank, the authentic bank certification actually reflected an outstanding balance below the minimum required paid-up capital for new pre-need companies,” Funa said.

“Upon further verification, it was likewise discovered that the said bank account has already been closed,” the IC chief added.

Aside from informing the depository bank that the certification it had issued was tampered with, the IC was also considering to file administrative and criminal charges against officials of Prime Care Kaagapay.

Also, Funa already placed the pre-need firm under conservatorship so the regulator can take over company’s assets and management.

“With the issuance of the conservatorship order, the IC will take over the assets of the company to ensure that the same will remain focused in the provision of services and the continued protection of the interests of planholders of the company. This is in the nature of preventive measure to ensure that the company’s assets will be solely used for legitimate business purposes,” Funa said.

“While we cannot disclose the details of the ongoing investigation until its completion, we assure the public that we are carefully looking into all possible violations of the responsible officers and hold them liable,” he added.

In 2018, Prime Care Kaagapay applied for a license to sell memorial plans.

The company was headed by president and chief executive Pio P. Gubatana and chaired by Moryula Geru M. Oliveros.