AN OPEN LETTER
TO ALL STAKEHOLDERS OF
PRUDENTIALIFE PLANS, INC.
For over 3 years, Prudentialife Plans, Inc. (PPI) implored the Securities and Exchange Commission (SEC) and subsequently the Insurance Commission (IC) to reinstate its license and permit to sell pre-need plans which was revoked by SEC on April 20, 2009 to regain its financial viability.
On January 2, 2010, the IC assumed jurisdiction over PPI with the transfer of supervision and regulation of the pre-need industry from the SEC under the Pre-Need Code of the Philippines enacted on December 9, 2009.
The IC on September 13, 2010 declared PPI under conservatorship and appointed Atty. Rosario S. Bernaldo as PPI’s Conservator.
On December 9, 2011, PPI filed its proposal for Corporate Rehabilitation with the IC.
Upon an exhaustive examination of the financial and operational condition of the company for almost 2 years, Atty. Bernaldo endorsed PPI’s program as the best and most viable among 4 other proposals submitted to IC. Within the same period, she recommended to IC 4 times that PPI be given the license to sell life plans to become an on-going concern once again. More importantly, Atty. Bernaldo found that it would be better for all concerned planholders that PPI be rehabilitated rather than dissolving it outright.
In a liquidation scenario, planholders shall get an average of P17,787 only while under PPI’s enhanced rehabilitation called “Balik Bayad” Program, each planholder on the average would receive P34,400 using the present value of money approach.
Through a series of dialogues between PPI and the IC, management has worked relentlessly for the rehabilitation of PPI because of its firm belief that the company has good chances of being an on-going business if its life plan license were restored and the Balik-Bayad Program, the core of PPI’s proposed rehabilitation plan submitted to the IC on December 9, 2011 would be approved.
It’s been a year since the public consultation hearings on the Corporate Rehabilitation Program of PPI were conducted by the IC on March 2 and 13, 2012. Since then, several notable developments have transpired which affect our stakeholders especially the over 300,000 PPI planholders, namely:
1) Last March 7, 2012, in addition to the first conservator, Atty. Bernaldo, the IC appointed Atty. Dionne Marie Sanchez of SYMECS Law as Co-Conservator to oversee and preserve PPI’s corporate assets.
2) On June 1, 2012, the first IC-appointed Conservator, Atty. Bernaldo, submitted her final report recommending the PPI enhanced rehabilitation plan to the IC aptly called “Balik-Bayad Program.” Atty. Bernaldo evaluated 4 submitted proposals from Manila Bankers Life Insurance Corporation, Loyola Plans Consolidated, Inc., Abundance Providers and Entrepreneurs Corporation (APEC) and a group of planholders headed by Mr. Jose Rizal O. Batiles.
3) On September 19, 2012, the IC placed PPI under receivership despite the favorable recommendation of Atty. Bernaldo.
4) On October 19, 2012, the IC ordered the liquidation of PPI, appointing SYMECS LAW as liquidator and immediately terminated all employees of the company. At the same time, it took over the head office and closed the remaining branches nationwide.
Immediately, PPI challenged the final order and resolution of the IC in CRL Ref No. 2011-001 (the “Directive”) placing the pre-need company first under receivership, then under liquidation. PPI filed with the Court of Appeals a Petition for Review (with Application for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction) in the matter of PPI’s Conservatorship and Corporate Rehabilitation pursuant to Rule 43 of the Rules of Court, in relation to Section 50 of Republic Act No. 9829, otherwise known as the Pre-Need Code of the Philippines. Subsequently. The Petition is primarily aimed to determine whether or not the IC erred in rejecting the proposed rehabilitation plan featuring the Balik Bayad Program. PPI believes that the planholders will benefit more under a rehabilitation scenario rather than liquidating the company outright. On October 29, 2012, PPI filed a Manifestation with Urgent Motion to Resolve the Application for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction.
5) On November 20, 2012, the Committee on Banks and Financial Intermediaries of the House of Representatives chaired by Rep. Sergio F. Apostol held the 1st Congressional Hearing on PPI’s rehabilitation proposal in aid of legislation. PPI submitted to the Committee on November 27, 2012 an Executive Summary and a copy of the Petition that it filed with the Court of Appeals. The Technical Working Group was called by Chairman Lorenzo “Erin” R. Tanada III last January 31, 2013.
6) On November 23, 2012 and December 28, 2012, two (2) groups of Petitioners-Intervenors representing numerous planholders who bought education, pension and life plans from PPI filed separate Motions to Intervene in the case with the Court of Appeals as it directly relates to the IC Directives; specifically, in its September 19, 2012 Directive rejecting the proposals for the rehabilitation of PPI and ordering its receivership. Subsequently, the IC ordered the liquidation of PPI in its October 19, 2012 Directive. They stand to be affected by any decision by the Court of Appeals as they are at present already prejudiced with the uncertainty of recovering the installments paid under their respective plans.
7) On January 16, 2013, the Court of Appeals issued a resolution submitting PPI’s Manifestation with Urgent Motion to Resolve the Application for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction for resolution.
As we await the decision of the Court of Appeals, we remain steadfast in the face of legal challenges and never waiver in the belief that PPI planholders are better off under a regime of rehabilitation rather than liquidation; and that the company has good chances to continue as an on-going business.
It is our fervent hope that the IC as regulator of pre-need firms must take into account the interest of all stakeholders within reasonable parameters and applicable rules of procedures governing corporate rehabilitation as mandated by the Pre-Need Code.
To know more about PPI’s proposed Corporate Rehabilitation Program and the Petitions filed with the Court of Appeals, you may visit www.prudentialifeph.com.