Danvil planholders sue Philippine Prudential Life Insurance for cancelling benefit means BUSINESS

MANILA - (UPDATED 5:16 p.m.) About one hundred plan holders of Danvil Plans Inc trooped to the Inusrance Commission (IC) on Thursday, asking the regulator to revoke the license of Philippine Prudential Life Insurance Co for the sudden termination of the benefits of their paid-up policies.

The planholders have filed before the commission adminstrative and criminal charges against the management of Philippine Prudential.

Photo by Michelle Orosa, News5

Those with claims of P100,000 and below would file their case before the IC and those with more than P100,000-claims would be filing charges before the regional trial court.

One planholder told News5 that they have been saving up since 2004 to pay for the education plan and protector plan they bought from Danvil. They said Philippine Prudential's license must be revoked so people would not be duped into buying these products again.

They lamented that until now Philippine Prudential still operates with a license and is still selling insurance and preneed products.

The Danvil planholders want to redeem 100 percent of their payments instead of the 30 percent arranged by Philippine Prudential Life.

These planholders fought for the "no claim bonus" benefit promised to them by Berkley International, wherein clients whose plans that have no claims within 10 years can get a P100,000-bonus.

Rod Estrera, Philippine Prudential corporate communications head, told that Berkley International had two companies in the Philippines prior to its pull-out in 2007: Berkley Plans and Berkley Life Insurance.

Berkley Plans was later bought by its chief financial officer, Daniel L. Villanueva, and was renamed into Danvil Plans. The life insurance unit of Berkley International had totally pulled out of the country.

However, Berkley Life had a product, similar to today's insurance "rider", that the company called insurance protector, which allows the insurnance policy to pay for itself if the policyholder dies before the insurance policy has matured. The planholders of Danvil's Family First Future Provider who were enrolled in this protector plan called PNCB are supposed to enjoy five riders: accidental death benefit, permanent disability benefit, hospital income benefit, burial benefit and the "No Claim Bonus"--the latter rider was availed at no cost to the client.

This protector plan was bought by Danvil as well but had to have an insurance company to take care of its perpetuation as it was orphaned by Berkley Life's pullout from the country.

So in 2007, Philippine Prudential Life absorbed all the protector plans of the Berkley International that was left with Danvil since the IC, "required the assumption of Berkley International’s obligations by Philippine Prudential in view of the surrender of Berkley International's license as an insurance company and its exit in doing business in the Philippines," the insurance firm's official statement said.

According to Estrera, they took in Danvil as a client under a group master policy, which is like taking the group insurance of a company for its employees. In this case, however, Danvil used the group master policy for the planholders left with them.

Under the group master policy, if the membership or participation falls less than 75 percent, then the insurance company can terminate the policy at any time.

"Group life insurance (wholesale life insurance or institutional life insurance) is term insurance covering a defined group of people, such as company employees, union or association members and, in this case, the Family First Future Provider Planholders. Individual proof of insurability is not the primary consideration, but more of the size, turnover and financial strength of the group," Philippine Prudential said in an earlier statement.

Estrera said Philippine Prudential in 2010 already saw that participation had fallen below 75 percent of the 4,000 planholders with Danvil so they had to terminate the group policy as "it is already a heavy burden to us."

"We are just like a supplier of life insurance coverage for them [Danvil Plans]. We did not buy the company [Berkley], their business nor their potrfolio. We just sold Danvil the coverage. We are under no obligation to pay for the 'no claim bonus'," Estrera said.

Philippine Prudential said a series of consultations with the IC, Philippine Prudential Management and representatives of the concerned planholders were held.

"As a result of these meetings and as a gesture of goodwill, Philippine Prudential has offered to refund to these planholders a substantial portion of the premiums paid by them. After four mediation conferences, however, the Company’s offer and the specifics of its implementation were not accepted by the claimants who still insisted on a full or 100 percent refund of their premiums," the company said.

According to Estrera, their offer to pay 30 percent of the "no claim bonus" still stands.