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Of late,
the Senate has been preoccupied with governance and
corruption issues plaguing the Arroyo administration,
and rightly so. After all, honest, sincere and effective
governance in the public sector requires the most
stringent standards for transparency and accountability.
And it
is only with a thorough review by either the Senate or
other bodies like the Ombudsman of the prevailing
processes, particularly for government procurement, that
an effective system be put in place for minimizing
corruption and inefficiency in government service.
Since
time immemorial, the state has been finding ways and
means to combat corruption, but has made little headway
in the campaign. At best, perhaps, corruption can be
kept at a minimum. But total eradication seems to be
difficult, if not impossible. Anywhere in the world
there is always corruption, not only in the public but
also in the private sector, although in many cases the
cost of such is kept to a minimum— with gains or
benefits of initiatives far outweighing the collateral
damage caused by lack of scruples or indiscretion, or
intended misdeed by regulators.
Even
locally, the private sector is far from insulated from
misdeeds. In fact, reforms, particularly in the stock
exchange, in the last five years or so were prompted
mostly by uncovered fraudulent actions and other
attempts to deceive the public for personal gain or
benefit. Only recently, such allegation of deceit also
hit the local insurance industry, with a policyholder
and former insurance-company officer hurling charges of
fraud and misrepresentation against the owners and
officers of his former employer and insurer.
In a
formal complaint filed with the Insurance Commission
just recently, a copy of which was sent to the
BusinessMirror, policyholder Jose Melford Fuentes
accused directors and officers of Paramount Life and
General Insurance Corp. of the following alleged
misdeeds: “(a) deliberate gross misrepresentation. . .
by not declaring [in its books] at least P125 million in
loan liabilities, and (b) the overprice. . . made, and
not transferring [to the company] the assets intended
for policyholders’ benefits. . . .”
He also
accused company directors and officers of incurring
debts and not declaring them in company financial
statements, “deceivingly bloating [company] capital in
financial statements” in order to get a Certificate of
Authority to operate from the Insurance Commission and
using assets reserved for policyholders’ benefits “for
their personal use. . . benefit and. . .
self-enrichment.”
Fuentes
also alleged that it was only through a letter of
undertaking given to the insurance commissioner that
Paramount got its Certificate of Authority to operate,
even if its life and nonlife insurance companies were
allegedly insolvent by more than P450 million. Named
respondents in the complaint were Patrick L. Go, Rosanna
L. Go and George T. Tiu, whom he claimed were the
directors and officers of Paramount Life and General
Insurance Corp. Fuentes also claimed to be a former
employee, senior officer and member of the board of
directors of Paramount, even stating in his complaint
that he was the company’s acting managing director for
life operations until his resignation on March 31, 2007,
implying that, for a time, he was very much privy to
goings-on in the company.
Fuentes
also stated in his complaint that as early as October
2007, six months after his resignation from Paramount,
he already wrote the insurance commissioner on the
alleged “dishonesty, deceit and deliberate gross
misrepresentation [by the respondents] for the
undeclared loans and for not infusing [into Paramount]
assets worth at least P201 million that [Manila Bankers
Life Insurance Corp.] transferred to [Paramount] for the
benefit of the former policyholders of [Manila Bankers
Life Insurance Corp.] who are now policyholders of
[Paramount].”
It’s
best that the Insurance Commission review the Paramount
case closely, to determine whether company officers and
directors are actually at fault for anything. If the
allegations are proved to be true, then they should be
held accountable for their actions. But if it turns out
that Fuentes’s complaint is baseless and nothing more
than the ravings of a disgruntled employee, then he
should, likewise, be held accountable for causing injury
to the respondents.
The
commission’s urgent action will help in immediately
vindicating Paramount directors and officers if, indeed,
they were just maliciously and falsely accused. On the
other hand, such urgent action will also help determine
whether Paramount’s insurance companies remain
financially stable and viable. Studies indicate that
Filipinos do not buy enough insurance to cover or
protect themselves from untoward incidents. However,
cases such as that of Paramount, and of preneed
companies that have gone under or are currently in
financial rehabilitation, have done lots in shaking
public confidence in both the preneed and insurance
industries. It’s time that the attention to good
governance is directed both at the public and private
sectors.
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