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carrier Asian Spirit is once more insured by Prudential
Guarantee and Assurance Inc., this after the airline
revoked its appointment of an insurance broker and
committed to settle the carrier’s premiums Wednesday,
June 25.
In a
letter addressed to Lucio Fernandez, vice president for
aviation and marine of Prudential Guarantee, dated June
23, 2008, and received by Prudential at 7:23 p.m., Asian
Spirit chief finance officer Albert Toribio said: “After
a careful evaluation of the situation, I have decided to
revoke the appointment I made in favor of Empire
Insurance Co., as exclusive broker of record.
“I hope
this letter will set the record straight that we have
never rescinded the existing insurance covering our
aircraft with your company. It is our desire to continue
to preserve our harmonious relationship.”
In his
letter, a copy of which was obtained by the
BusinessMirror, Toribio added: “As regards to our
premium payment for the 2nd Quarter, we will make
remittances by Wednesday.”
An
official of Prudential Guarantee, who requested
anonymity, declined to reveal the actual amount owed by
the airline, only to say: “They have not been religious
in paying their financial obligations.” Knowledgeable
aviation and insurance sources estimated the
second-quarter premium of Asian Spirit at some $200,000.
Under its previous owners, Asian Spirit’s premiums
amounted to $500,000 per quarter.
“It was
just a misunderstanding,” said Art Alejandrino, board
director of Asian Spirit, of the situation, which
resulted in the airline flying without insurance
coverage from June 19 to June 23, 2008.
He made
this statement in reference to a letter written by
Toribio entitled, “Appointment-Sole & Exclusive Broker
on Record” on June 18, 2008, designating “Empire
Insurance Co. Inc., as the exclusive insurance company
of Asian Spirit for its Aviation,
Hull & Liability, Deductible, War, Personal Accident and
other aviation-related insurance requirements.”
Prudential Guarantee managed to secure a copy of
Toribio’s appointment letter, causing the insurer to
write him on June 19, 2008, saying: “By your unilateral
action of appointing another insurance company from the
18th of June 2008, you have, in fact, rescinded your
insurance contract with Prudential Guarantee and
Assurance Inc. and, therefore, there is no insurance
policy in effect from the date of issuance of your
letter [June 18, 2008].”
However,
CAB sources confirmed there is no insurance contract
between Empire Insurance and Asian Spirit. Thus, from
June 19 to June 23, Asian Spirit was flying without any
insurance cover.
Alejandrino, however, disputed this, saying the airline
did not fly any day without insurance coverage. He
explained that upon receiving Prudential Guarantee’s
letter on June 20, the carrier “made inquiries abroad
and we received an e-mail that [Prudential Guarantee]
did not issue a notice of cancellation [of its contract
with Asian Spirit]” to its reinsurer, AIG. “So all the
while, we knew we were covered by Prudential.”
Alejandrino said he would send a copy of said e-mail
from AIG but as of 4 p.m. Tuesday, the BusinessMirror
had yet to receive it.
Toribio’s letter to Prudential’s Fernandez on June 23
said, “Please note that the issuance of such BOR [broker
of record] was made only to determine the fair-market
price for insurance coverage such as the company
requires, and not intended as a rescission of our
existing insurance contract.”
As for
Asian Spirit’s premiums which remain unpaid for the
second quarter of the year, Alejandrino said: “I assure
you, we are a little delayed but not that far off. The
delay falls within the normal client-insurer
relationship. It is not a cause [for Prudential] to cut
our insurance.”
He added
that Asian Spirit’s new owner, fruit-juice king and
banker Alfredo M. Yao, personally called up Prudential
Guarantee’s chairman and chief executive officer Robert
Coyiuto Jr. and VP Fernandez at about 7 p.m. Monday to
tell them, “If there is such a problem, all you can do
is call me.”
Alejandrino added, “I admit there was some
miscommunication [between Toribio and Fernandez], but
they [Prudential Guarantee] confirmed that we had
[insurance] cover as of 7 p.m. [Monday].”
Separate
sources said Yao called Fernandez after finding out that
the BusinessMirror would publish a story that the
carrier was flying without any insurance. “Yao told
Fernandez he didn’t know that Toribio had issued an
appointment letter in favor of Empire Insurance. He also
said that he would instruct Toribio to issue a letter
revoking the appointment of Empire Insurance. Yao
promised to settle the premium owed to Prudential by
Wednesday [January 25].”
Contacted for comment, Fernandez declined to comment on
the matter and did not confirm that Yao called him.
An
official of Prudential Guarantee who declined to be
named, said of the premium payment to be made by Asian
Spirit, “It is immaterial.” Asked whether Prudential
Guarantee is insuring the carrier again, the official
said: “We have been reinstated as their insurer.” |
