The Insurance Commission (IC) has ordered Eternal Plans Inc. (EPI) to be placed under conservatorship beginning January 2022 for its failure to comply with its directive to fill the cash deficiency in its 2018 Trust Fund as required under the Pre-Need Code of the Philippines.

IC Commissioner Dennis Funa signed the conservatorship order against EPI on Jan. 20, 2022, citing as reason the company’s “continuing inability or unwillingness to comply with the Order of the Commission pursuant to Section 49 of the Pre-Need Code (Republic Act or RA 9829).”

Funa also named John Apatan, the division manager of the IC’s Conservatorship, Receivership and Liquidation Division, as ex-officio conservator for the EPI.

According to Section 49 of the Pre-Need Code, “a conservator may be appointed to take charge of the assets, liabilities, and the management of such company, collect all moneys and debts due the company and exercise all powers necessary to preserve the assets of the company, reorganize its management, and restore its viability.”

In his memorandum to Finance Secretary Carlos Dominguez III dated Jan. 31, 2022, Funa said EPI had asked for regulatory reprieve with an additional request to undergo rehabilitation after failing to meet the IC’s deadline to make a cash infusion sufficient to fill its Trust Fund deficiency.

“We find this request consistent with the regime of conservatorship. Hence, the case of the company falls under the conservatorship process under the Insurance Code,” Funa said in his report to Dominguez.

Funa said no more correspondence and/or submission was received by the Commission from EPI and the “required Trust Fund deficiency remains deficient.”

The IC directive was for EPI to infuse cash into its Trust Fund within five days from the receipt of the IC’s letter dated Nov. 18, 2021.

After the EPI asked for an extension, the IC gave it until Dec. 28, 2021 to comply with the order.

In a letter dated Dec. 22, 2021, the IC reiterated that EPI’s previous non-cash contributions were provisionally approved with the condition to sell the same within one year, or to replace the same with cash if the said assets remain unsold after the given period.

Funa said the IC also made it clear to EPI that non-cash contributions cannot be accepted as the Pre-Need Code requires that deposits to the trust fund should always refer to cash.

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