MANILA, Philippines - Planholders of Prudentialife Plans were dismayed when they heard the announcement the pre-need firm will not pay out claims due to financial problems and as ordered by the Insurance Commission (IC).

Margie Celis, a planholder of Prudentialife Plans, said she was concerned about how she will pay the tuition of her child.

"Pangtuition pa sana yun ng anak ko...natatakot ako na baka matulad ito sa ibang kumpanya," she said.

The Insurance Commission said it released a stay order so that Prudentialife Plans  will not run out of funds.

"We have to intervene, kasi kung hindi kawawa yung mga iba na hindi pa nagmamature ang claims. Kawawa naman sila," conservator Atty. Rosario Bernaldo said.

The Commission said the financial problems of the pre-need firm started during the global financial crisis in 2008.

In 2009, the Securities and Exchange Commission ordered the firm to stop selling new pre-need plans.

But since no new funds were coming in, Prudentialife Plans is now in danger of running out of funds.

The company has around 200,000 clients who are holders of educational, pension and life plans.

According to the stay order:

• All actions or proceedings, in court or otherwise, for the enforcement of all claims, whether for money or otherwise, against PPI are suspended;
• PPI is  prohibited from selling, encumbering, transferring or disposing in any manner whatsoever any of its properties except in the ordinary course of business;
• Likewise, PPI is prohibited from making any payment of its liabilities outstanding as of February 6, 2012.

However, payment of terminated plans already processed as of February 6 will not be suspended.

Operations to continue

However, Prudentialife Plans tells its clients that it will continue its operations.

In a statement, Prudentialife Plans assured its stakeholders and its planholders of its continued operations despite the IC's stay order, which was effective February 6.

The company has submitted a rehabilitation plan to the Insurance Commission on how to fix its problems.

However, some educational planholders remain very concerned.

"Syempre bilang magulang matatakot ka rin kasi future ng anak mo ang nakataya," Sergio Martinez, an educational planholder of Prudentialife Plans, said.

The pre-need firm will hold consultation meetings with its planholders, creditors, stockholders and other interested parties  on March 2 and 13 to discuss its corporate rehabilitation. The meeting will be held on March 2 and 13 at 9 a.m. at the IC Board Room, Insurance Commission, 1071 United Nations Avenue, Manila. - With ANC