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CEBU CITY, Philippines - Cebu-based clients of Philippine American Life and General Insurance Co. (Philamlife) have mixed reactions when news broke out that the company has been put on sale.
Bernadette Lim, 29, of Barangay (village) Guadalupe, Cebu City availed of an Excelife product on August 30 and made her first payment of P25,000 just last month.
Lim, an architect working in a government agency, was attracted to the product because it allowed her to get range of benefits which answered her basic needs of protection, health and savings.
But since news came out that American International Group (AIG) will sell Philamlife, Lim said she started to feel “unsure.”
Entrepreneur Rey Calooy, however, has a separate view on the issue.
Calooy's two children have educational plans, while he has availed of a life insurance plan under Philamlife.
“There is no cause of alarm. Philamlife is independent of AIG because it has its own strong capital base,” said Calooy, also the president of Filipino Cebuano Business Club Inc.
Lim and Calooy are two of over one million Philamlife clients nationwide, said Cecile Lizares, company vice president and director for agencies in the Visayas.
Asked how many of these clients and policy holders come from Cebu and the Visayas, Lizares said the figure is not yet available at the moment.
She, however, told Cebu Daily News that Philamlife president and chief executive officer Jose Cuisia will be in Cebu on Saturday to meet with their clients and answer questions from the local media.
Cuisia assured the company's stakeholders, depositors and policyholders that Philamlife remains “strong, stable and committed.”
In a press statement, Insurance Commissioner Eduardo Malinis said that “Philamlife remains to be the largest insurance company in the Philippines with the strongest balance sheet in the industry.”
Malinis said the company is “adequately capitalized” so it can meet its commitments and obligations to customers and policyholders.
The assurance, however, is not enough to appease Lim.
She said a Philamlife agent has told her that the company is stable and has place most of its investments in local stocks.
But Lim said she still could not help but speculate that the worse had just begun.
“The product is worth P250,000 and payable in 10 years. It will take that long pa so I am wary. What happens if during the eighth year, they will declare that they're bankrupt?” she said.
The panic among people may have stemmed from the experience with pre-need firm, College Assurance Plan (CAP), in mid-2000, according to Calooy.
“Philamlife's situation is different with CAP. CAP is a pre-need firm. Philamlife, on the other hand, has diversified to other products and services,” he said.
A pre-need firm offers memorial, pension and education plans.
Calooy said CAP sold traditional or open-ended educational plans which eventually collapsed when tuition rates were deregulated in 1992.
Tuition rates soared and pre-need firms had to catch up to meet obligations since most of these traditional plans were already sold.
“Philamlife has the fixed value education plan, which means that if you are paying for a P200,000 plan, you will get the same amount when the plan matures,” he said.
This is one of way of measuring that Philamlife knows its liabilities, and will “not sell less that their liabilities.”
“So there's nothing to be afraid about. I'll be the first one to say that the company is falling down, but it's not,” noted Calooy.
