Insurance Commission places Eternal Plans under conservatorship

The Insurance Commission (IC) has placed pre-need firm Eternal Plans Inc. under conservatorship due to trust fund deficiencies, according to the Department of Finance (DOF) on Thursday.

In a statement, the DOF said the IC placed Eternal Plans under conservatorship beginning January 2022 “for its failure to comply with its directive to fill the cash deficiency in its 2018 Trust Fund as required under the Pre-Need Code of the Philippines."

Conservatorship is a form of legal guardianship that is used when an entity or person is unable to manage their finances.

The Finance department said Insurance Commissioner Dennis Funa signed the conservatorship order against Eternal Plans on January 20, 2022, citing as reason the company’s “continuing inability or unwillingness to comply with the Order of the Commission pursuant to Section 49 of the Pre-Need Code (Republic Act 9829).”

Funa appointed John Apatan, the division manager of the IC’s Conservatorship, Receivership and Liquidation Division, as ex-officio conservator for Eternal Plans, according to the DOF.

Under the Section 49 of the Pre-Need Code, “a conservator may be appointed to take charge of the assets, liabilities, and the management of such company, collect all moneys and debts due the company and exercise all powers necessary to preserve the assets of the company, reorganize its management, and restore its viability.”

In his memorandum to Finance Secretary Carlos Dominguez III dated January 31, 2022, Funa said Eternal Plans had asked for regulatory reprieve with an additional request to undergo rehabilitation after failing to meet the IC’s deadline to make a cash infusion sufficient to fill its trust fund deficiency.

“We find this request consistent with the regime of conservatorship. Hence, the case of the company falls under the conservatorship process under the Insurance Code,” Funa said in his report to Dominguez.

The Insurance chief said the commission has not received any more correspondence or submissions from Eternal Plans and the “required trust fund deficiency remains deficient.”

The IC directive was for Eternal Plans to infuse cash into its trust fund within five days from the receipt of the IC’s letter dated November 18, 2021, the DOF said.

After the Eternal Plans asked for an extension, the IC gave it until December 28, 2021 to comply with the order.

Sought for comment, Eternal Plans said the pre-need company “will continue delivering the promised benefits.”

Eternal Plans said the company made a substantial cash deposit to its trust fund amounting to P200 million and manifested to the IC its desire to go on a supervised rehabilitation, noting that this "will provide an enabling environment that will fast-track the implementation of its recovery plan.” 

“Eternal Plans Inc. is one with the Insurance Commission in protecting the interests of its planholders. The company assures the planholders that we will come out stronger from these financial difficulties within a short period of time,” it said. — VBL, GMA News