MANILA, Philippines - Planholders expressed strong opposition against the insurance exchange program proposed by troubled pre-need firm Prudentialife Plans Inc. (PPI).
PPI's plan was to transfer to Manila Bankers Life Insurance the ownership of its educational and pension plans trust fund and convert those plans into life plans.
According to PPI President Jose Alba, rehabilitation is a better option than liquidation since the liquidation value per planholder is pegged at only P19,534, while rehabilitation value is at P46,394 for pension plans and P25,168 for education plans.
PPI is hoping its proposed rehabilitation plan, which involves the insurance exchange program and a spin-off of its education and pension plan business, would restore its financial viability.
But PPI planholders said they need their money now and are unable to accept the fact that they will receive less than what they invested.
A planholder proposed that PPI issue preferred stocks to educational and pension planholders with guaranteed returns of 2% per year. The planholders are organizing a group and are mulling raising the issue to the courts if PPI insists on the insurance exchange program.
But the Insurance Commission clarified, the insurance exchange program is a mere proposal and they may either approve, modify or totally disapprove the proposal given the feedback that they received from the planholders today.
Another hearing is set on March 13 and the IC is hoping to come up with a decision on March 31 at the earliest.
Last month, the IC issued a stay order on Prudentialife Plans so that it will not run out of funds.