Insurance commission’s inaction

The Inquirer’s April 3 editorial stated that one of the favorable consequences of the Legacy fiasco is the passage of Republic Act 9829, which transfers the regulatory responsibility over pre-need companies from the Securities and Exchange Commission to the Insurance Commission.

I agree with the editorial that there is no government entity mandated to refund the investments made by pre-need planholders. But the pre-need law has given the commission ample powers—under Sec. 30, Chapter VIII (no diversion and withdrawal of trust fund), Sec. 38, Chapter VIII (entrusting the management and administration of the trust fund to any reputable bank), Sec. 51, Chapter XIII (full power and control over the trust fund) and Sec. 55, Chapter XV (exclusive power to adjudicate), among other powers—to carry out the policy of the State “x x x to prevent and mitigate, as far as practicable, practices prejudicial to public interest and the protection of planholders.”

As early as March 31, 2008, Prudentialife Plans Inc. has incurred capital deficit and trust fund deficiency in the amounts of more than P4.4 billion and P3.6 billion, respectively. Since the passage of RA 9829 in December 2009, we have not heard about any action by the commission to prevent the hemorrahaging of the capital and trust fund of the company even though it knew all along about these facts and despite its plenary powers under the pre-need law, thereby ruling out the chance of planholders to recover their hard-earned money.

—MANUEL C. LIM,

MCL Law Office,

Dimasalang, Masbate