By Chino S. Leyco The Insurance Commission (IC) announced yesterday that it has placed Mercantile Careplans, Inc. under conservatorship for the company’s failure to comply with the minimum capital requirement for pre-need firms. In a statement, Insurance Commissioner Dennis B. Funa said that Mercantile Careplans’ failure to meet the minimum capital requirement violated the provisions prescribed under Republic Act No. 9829 or the Pre-Need Code of the Philippines. “The result of the examination made into the affairs, financial condition, and methods of doing of business of Mercantile Careplans as of end-2018 disclosed that the company failed to comply with the minimum P75-million paid-up capital requirement. Particularly, Mercantile Careplans’ paid-up capital is impaired by P14.23 million,” Funa said. Funa further explained, “Under the Pre-Need Code, pre-need companies existing at the time of the effectivity of the law selling two types of plan are required to have a minimum unimpaired paid-up capital of P75 million.” Before the IC issued the Conservatorship Order, Mercantile Careplans was required to address its capital impairment. Mercantile Careplans, on the other hand, manifested to the IC that it is no longer financially capable of addressing its capital impairment citing that it ceased selling any plan starting this year and was merely servicing its existing and maturing plan holders. Funa noted that, while the company’s paid-up capital was impaired, the amount of its trust fund contributions were compliant with the requirements of the pre-need code. As a result of the Conservatorship Order, the management of the company was now under the IC-appointed conservator Marianne P. Lozada-Marquez. Mercantile Careplans has 5,622 enforced pension plans and 170 enforced educational plans as of end 2018.