Steel firm complains amid Insurance Commission’s alleged inaction on suits vs insurers
IS there an existing “unholy alliance” between the Insurance Commission (IC) and the country’s major insurance firms which could be the reason why the IC is very slow in resolving complaints filed against pre-need companies which refuse to pay the claims of their clients?
This could be the question the Steel Corp. of the Philippines (SCP) has long been seeking an answer to as the last remaining steel factory in the country sought the help of the Court of Appeals after the firm’s insurance claims worth over P1 billion continue to linger with the Insurance Commission more than a year after the filing of formal complaint with the IC.
The SCP is in danger of closing shop and going insolvent if it’s insurance claim of more than P1 billion from the nine insurance firms remains unheeded. And if the alleged “unholy alliance” between the IC and insurers turns out to be true, the Duterte administration should look into the performance of the IC which continues to procrastinate and delay the issuance of its decision regarding the SCP’s complaint against nine insurance companies.
Based on records, on July 25, 2007, SCP insured its assets including plants, buildings and equipment for material damage and business interruption losses with the following insurance companies: UCPB General Insurance Corporation -- 40 percent; Oriental Assurance Corporation -- 40 percent; PNB General Insurers Co., Inc. -- 15 percent, and Equitable Insurers Co., Inc. -- 50 percent.
On June 8, 2008 fire broke out at the SCP plant and destroyed most of the equipment and other assets of the company. When SCP claimed the insurance proceeds from the four insurance companies who refused to award the claim, a petition was filed with the IC under I.C. Case NO. RD-420.
After SCP’s sad experience from the first group of insurers, SCP decided to insure its asset to another consortium of insurers, namely: Philippine Charter Insurance Corporation – 29.5 percent; Mapfre Insular Insurance Corporation – 26 percent; Standard Insurance Co. Inc. – 12 percent; Asia Insurance Phils. Corp. 8.50 percent, and New India Assurance Co., Ltd. – 14 percent.
Unfortunately, another fire broke out on December 7, 2009. However, despite the fact that SCP having met all the requirements of the insurers and notwithstanding demand for payment of the insurance proceeds, “the insurers failed and refused to pay its claim for the material damage and business interruption losses sustained by SCP.” Thus, another case was filed with the IC docketed as IC Case No. RD-515.
Standard Insurance Co. Inc., a member of the consortium that insured the facility, paid its share of $5.025 million, effectively validating SCP’s claims. But the other consortium members have maintained a hardline stance refusing to pay SCP’s claims for the material damage and business interruption losses sustained in the 2009 fire,
Last July 28, SCP filed a Mandamus case with the Appellate Court to compel the IC to resolve all pending cases against the insurance firms filed by the embattled steel company for the two fires which its main plant suffered more than eight years ago.
The Mandamus case against the IC is due to its refusal to exercise its power and supervision of insurance companies which are provided in Section 437 of the amended Insurance Code (Republic Act 10607).