PDIC chief wants to simplify claims processes
MANILA - The unprecedented spate of closures of Legacy banks last year has prompted the Philippine Deposit Insurance Corp. (PDIC) to review and simplify its claims processes.
In a statement, PDIC President Jose Nograles ordered the review of the corporation's systems relative to claims processing so it can process huge numbers of accounts.
"Admittedly, our claims systems and processes were not structured to cope with the voluminous number of accounts involved in the almost simultaneous closure of the 12 Legacy banks," Nograles said.
Since PDIC's inception in 1963, Nograles said the corporation has seen such closures, which are "unparalleled in Philippine banking history." The 12 closed Legacy banks had deposits of around P14 billion in about 135,000 accounts, he said.
"Not surprisingly, the Legacy closures challenged our systems and procedures as well as our resources...We will henceforth enhance our systems to be able to process huge numbers of accounts," Nograles said.
A total of 25 banks were closed last year, while some 19 banks were shut down as of the first quarter of 2009. These successive closures, Nograles said, have stretched PDIC's resource to the limit.
Nograles stressed that PDIC is committed to pay all valid deposit insurance claims, but is challenged by its limited capacity to validate deposits and process claims.
Nograles said the PDIC has engaged top-notch consultant Professor Ronaldo Polancos of the De La Salle University College of Industrial Engineering to undertake a business process review of claims-related processes as well as a simplification of documentary requirements.
"Digital imaging is also being planned for the tons of bank records used for the examination and validation processes in the interest of efficiency. This will speed up the review of documents and records review as well conserve physical space," PDIC said.
In the meantime, PDIC appealed for patience from its depositors as the corporation continues to improve its claims processes.
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Still no payout for thousands of Claims and nearly 9 months
Legacy Group Banks – still no payout for thousand of Claims, on Anniversary of their closure
It is the Anniversary of the 12 x Legacy group Banks that got closed in December 2008 and most Depositors who submitted claims nearly 9 months ago, are still waiting for the PDIC to mail a payment check to them.
The first Legacy Group Bank to get closed was Rural Bank of Paranaque, on 9 December 2008, with MB Resolution No. 1616, issued by the Monetary Board. This was followed by 11 more MB Resolutions, closing all 12 Banks, with the last one being RB of Carmen on 19th December, with MB Resolution No. 1695.
The PDIC will tell the Claimants that all genuine Claims will get paid, and they do have the funds to make the payments. What the Claimants have not been told is when!
Whilst most Depositors understand the sheer volume of Accounts (135,000), the PDIC did take 3 months before announcing Claims Acceptance to those with Deposits of P100,000.00 and above. Normally the PDIC used to pride themselves on making such announcement in 9 x working days or less.
RB of Polangue was determined to be ‘involved’ with Legacy Group, but the Monetary Board did not issue a Resolution (No. 353) until 26 February 2009. There has been no ‘Claims Acceptance’ announcement for RB of Polangue by the PDIC however. More than 9 months, and still no ‘official’ public announcement for this Bank.
Section 14 of the PDIC Charter states the corporation should pay Claimants within 6 months from having submitted their claims. If a Court was to determine the PDIC are guilty of gross negligence in the handling of such claims, that delayed payment beyond 6 months, then staff involved could potentially go to jail.
I won’t dare to accuse the PDIC of gross negligence, since a Judge would have to decide that. However if the PDIC are capable of mailing a letter to a Claimant, such it gets a Makati C.P.O. date stamp just 2 days after the date on the letter. How come other letters can take 29 days to get mailed, according to such Post mark Date Stamps?
We can understand the need to make sure of the valid identity of the claimant is the same as that in whose name the CTD or Savings Passbook was issued, because the PDIC are answerable to the Commission on Audit. But I wonder what the COA says about taking 3 at least months checking the Banks records and documents, instead of 9 x working days or less, before announcing Claims Acceptance, then more than 6 months pass and the claimants have received nothing at all from the PDIC, in many cases. No letter giving specific status advice on a given claim, nor any request for an signed, notarized Affidavit, as the PDIC have done for some Claimed Deposit or Savings Accounts.
Jose Nograles along with other PDIC top ranking officials, appeared on ANC’s “The Big Picture”, hosted by Ricky Carandang”, in “The Legacy Mess” on Thursday June 18, 20009. Nograles said that all validated claims will be paid by the end of October.
However the PDIC seem to have different ‘stages’ of validation. If they tell a Claimant that their Claim has been ‘validated’. It might only mean the first stage of validation has been completed. It certainly does not seem to mean it is completed all stages of validation such that one will get paid shortly thereafter.
The PDIC do send out Letters, we have one dated October 27, 2009, but having a Makati City C.P.0. 25.X.09. stamp! The letter pertains to a Claim for payment of insurance on a Special Savings Deposit (for which the Claim was submitted on 25th March). So it took the PDIC more than 7 months to communicate with the claimant and it is a ‘demand’ to supply an executed ‘Affidavit of Ownership with Circumstances’ surrounding the placement/s of said deposits, and submit the same with supporting documents on or before November 27, 2009.
This sent as Registered Mail with Phil Post, not via courier, and the letter not actually arrived in Talisay City C.P.O. until ‘Dec 10, 2009’, some 2 weeks after the submission deadline.
“Failure to comply with the above requirement/s on the aforesaid date shall be ground for denial of your claim/s”
So the PDIC write a letter more than 7 months after the claim was submitted than take a month getting it to the Post Office who then take 16 days to deliver such Registered Mail to the Claimants Post Office. But this is 14 days past the deadline and gives the PDIC grounds for dismissal. Sure the PDIC say you can photocopy the mailing envelope, showing it was impossible to comply with such deadline, and they will grant an extension. What an extension to 25th December 2009 when it becomes 9 months from having submitted the claim for this insured Deposit, and more than 12 months since the Bank got closed?
What happens when the PDIC do receive such executed Affidavit and any additional documents that they specified?
Well in the past they completed the claims processing and issued a payment check within 2 weeks. However we have evidence of the PDIC having received such executed affidavit by LBC courier the next day, and that was nearly 5 months ago!