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The Trade Union Congress of the Philippines (TUCP) said it expects whoever wins the bidding for Philippine American Life and General Insurance Co. (Philamlife) to unconditionally honor all of the firm's benefit obligations to its more than one million policyholders.

"Our union members, many of whom are policyholders of Philamlife or wholly owned subsidiary Philam Plans Inc., are counting on the acquirer to immediately assure policyholders that all their valid policies will remain intact and unchanged," said former Senator and TUCP secretary-general Ernesto Herrera.

"We must stress that the prospective new owner of Philamlife is absolutely duty-bound to honor all insurance and pre-need contracts, without in any way altering or amending the terms and conditions of the original policies," Herrera said.

"We are counting on both Philamlife and the future new owner to promptly write to all policyholders to this effect," Herrera added.

Herrera was reacting to reports that three "preferred bidders" for Philamlife have emerged, namely: Ayala-owned Bank of the Philippine Islands in alliance with Britain's Prudential plc; Henry Sy's Banco de Oro Unibank Inc. and partner Assicurazioni Generali S.p.A of Italy; and Canada's Manulife Financial Corp.

Philamlife has been put on the auction block for $800 million to $900 million (P37.6 billion or P42.3 billion) by its New York-based parent, the American International Group Inc. (AIG).

Herrera said TUCP was counting on regulators "to exercise some oversight with respect to the sale of Philamlife, to ensure that the prospective new owner categorically pledges to unconditionally honor all binding policy contracts entered into by Philamlife."

Both the Insurance Commission (IC) and the Securities and Exchange Commission (SEC) "should see to it that the hopes and dreams of Philamlife's over one million policyholders are adequately protected in the transaction," Herrera said.

"Many policyholders, mostly salaried workers, have been asking us about their savings in Philamlife. We've been telling them they should stand still. Their money in the trust funds of Philamlife or Philam Plans, which are outstanding brands, cannot be touched by anyone. That even the new owners cannot touch the funds, except to pay maturing policies or valid claims," Herrera said.

According to filings with the SEC, Philam Plans alone, which has more than 300,000 plans in-force, had over P30-billion worth of assets in its trust funds as of December 31, 2008. - The Bohol Standard

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