NOTICE to ALL DANVIL Planholders:
If you have not heard about the July 30 deadline, read this:
At the Senate hearing on pre-need firms, former Legacy executive Carolina Hinola accused SEC Commissioner Jesus Enrique Martinez of covering up Legacy’s financial problems after accepting gifts from Legacy, including a 5-million-peso house and lot and a 1.5-million Ford Expedition from Legacy head Celso de Los Angeles.
Insiders also claimed that Martinez tried to broker the sale of Danvil Plans to the Legacy Group. The sale did not push through after Danvil Plans backed out of the deal allegedly upon the advice of other top pre-need executives.
(Martinez died on May 6 due to colon cancer complications.)
SEC has canceled the license of Prudentialife Plans Inc. to sell preneed plans because of its trust fund deficiency.
Prudentialife however said that its estimated trust fund of 12 billion pesos is enough to cover its obligations to about 400,000 planholders.
Prudentialife said it is still allowed to sell their other products like life insurance, health plans and mutual funds. Prudentialife President Jose Alberto Alba insisted that his firm will survive the crisis because of its 31-year history of strong performance, including survival of the CAP collapse and the 1997-1998 crisis.
Permanent Plans or Permaplans has decided to stop its operations because of trust fund losses in 2008. In response, SEC canceled Permaplans’ license. Permaplans said it will pay all its planholders (about 10,800) in the form of cash and other types of assets in the next 4 to 6 months.
Paranaque Representative Roilo Golez condemned CAP for giving only about 400 pesos per sem to most of about 700,000 CAP planholders under a court rehabilitation program.
Chit Baita, head of a group of CAP planholders, questioned court-appointed receiver Mamerto Marcelo for allowing CAP to sell its MRT III bonds and use the proceeds to pay off other firms owned by CAP owners, the Sobrepenas, instead of using the money to pay planholders.
CAP responded to the report that it is giving out only 400 to 500 pesos per sem to planholders by announcing that it has paid over 220 million to planholders since 2007 and that it is following court-approved schedules for paying planholders in installments up to 2011 and then full payments starting 2012.
CAP instructed planholders to check its list of 147,000 planholders on its website www.cap.com.ph for 334,000 checks ready for release.
Investigators said fraudulent schemes and fund diversions led to the collapse of Legacy’s banks and pre-need firms. Legacy’s pre-need firms owe about 1.3 billion pesos to its estimated 50,000 pre-need planholders, including more than 12,000 soldiers and police officers who have paid over 320 million pesos through monthly salary deductions by the AFPSLAI.
Coco Plans said it has 1.4 billion in its trust fund and it is able to cover maturing policies within the next 9 years, according to Coco Plans president
Caesar Michelena. He said the deficiency of 190 million will be covered within 3 years under a program submitted to the SEC.
The SEC announced that three preneed firms — Coco Plans, AMA Plans and Danvil Plans — had trust fund deficiencies. Coco Plans and Danvil Plans have
already submitted their plans on how they can restore their trust funds to adequate levels.
Caesar Michelena, president of Coco Plans and newly-elected head of the Philippine Federation of Pre-need Plan Companies, expressed his hope that no more pre-need company will shut down.
Previous PFPPC President Juan Miguel Vasquez resigned after his firm Permanent Plans decided to cease operations.
Some Permanent Plans planholders complained at the Senate hearing that Permaplans is offering a 60/40 payment scheme — 40 percent of their maturity value in cash and 60 percent in food and health supplies and lots at a burial site in Payatas.
In a statement made on April 22, Permanent Plans President Juan Miguel Vazquez reiterated that the contracts held by Permaplans planholders allow the company to change the mode of settlement or payment of plans.
PDIC President Jose Nograles revealed at the Senate hearing that there are still more than 35,000 unclaimed bank accounts under the failed Legacy Group. Senator Mar Roxas asked PDIC to inform the depositors through the mail.
President Arroyo ordered SEC Chair Fe Barin to determine the financial condition of the preneed firms to ensure that they can meet their obligations
as the plans mature. Arroyo demanded that criminal prosecution be taken against erring firms.
Justice Secretary Raul Gonzalez said there are loopholes in the law of receivership, allowing failed pre-need firms and other businesses such as condo developers to walk away from their obligations.
Coco Plans announced that it has paid all its obligations to all its educational planholders this school year.
The SEC assured pre-need planholders that the 22 licensed preneed firms, including Danvil Plans, are financially stable enough to pay their obligations to their planholders. SEC said it has reviewed the financial records of the pre-need firms.
The 22 pre-need firms with licenses to sell plans this year include AMA Plans, Ayala Plans, Caritas Financial Plans, CityPlans, Cocoplans, Danvil Plans, Destiny Financial Plans, Eternal Plans, First Country Plans, First Union Plans, Grayline Plans, Himlayang Pilipino Plans, Loyola Plans Consolidated, Manulife Financial Plans, Mercantile Careplans, Paz Memorial Service, Philam Plans, Provident Plans International, St. Peter Life Plan, Sun Life Financial Plans, Transnational Plans and Trusteeship Plans.
About 525,000 educational planholders have been trying to get money for their children’s enrolment this school year from 5 failed pre-need firms: CAP, Pet Plans, Platinum Plans, Pacific Plans and TPG Corp.
Meanwhile, Pryce Plans, still solvent but low on cash because it invested in real estate, memorial lots and listed equities, has been issuing checks in queues and paying in kind to consenting planholders.
President Macapagal-Arroyo returned the SEC under the supervision of DTI, nine years after she placed SEC under DOF. Observers said the transfer was caused by SEC’s failure to prevent the collapse of preneed companies owned by Legacy.
SEC has required pre-need firms to increase the percentages of their trust fund deposits. For every peso paid by a pension and education planholder during the first year, the pre-need firm must deposit 70 cents, a big increase from the previous 5-cent requirement. This requirement will apply only to new plans. Required increases percentages for other plans were also issued.
Above notes were gleaned from various articles and videos published on Inquirer.Net and GMANews.TV.