IC places pre-need firm under conservatorship

Published January 24, 2022, 4:09 PM

by Chino S. Leyco

The Insurance Commission (IC) has placed pre-need firm Himlayang Pilipino Plans, Inc. (HPPI) under conservatorship due to poor financial management.

In a statement, Insurance Commissioner Dennis B. Funa said on Monday, Jan. 24, that HPPI was placed under conservatorship following its “continuing inability or unwillingness to comply” with the regulator.

Funa said he had previously issued a cease-and-desist order against HPPI for failing to address its insolvency issues and fill up its trust fund deficiencies.

He disclosed that HPPI has insolvency problem amounting to P112.30 million and has trust fund deficiencies of P184.88 million based on its 2020 Annual Statement (AS).

“Prior to the issuance of the CDO, the Commission gave HPPI ample time to comply with these instructions. However, despite extensions granted by the Commission, HPPI still failed to abide by its undertakings,” Funa said.

He also disclosed that HPPI had requested for “various regulatory reliefs,” such as authority to venture into high yielding investment portfolios, suspension of the directive to fund deficiencies, and withdrawal of the excess of the trust funds for both education and pension plans.

However, the requests were denied due to various legal considerations, which eventually led to the issuance of the CDO and later, the conservatorship order, Funa said.

Section 49 of the Pre-Need Code of the Philippines (Republic Act No. 9829) authorizes the Insurance Commission to place a company under conservatorship should it find “that such company is in a state of continuing inability or unwillingness to comply with the requirements of the Code and/or orders of the Commission.”

“Bearing in mind that the pre-need business is imbued with public interest, it is this Commission’s mandate to safeguard of the rights and interests of the public while, at the same time, ensure the financial resilience of the business,” Funa said.

“By placing HPPI under conservatorship, we aim to restore the company to financial viability with the ultimate objective of protecting the interest of its planholders,” he added.

HPPI was incorporated in 1978.

 
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