Concealing transgressions, Part 3

THIS IS to outline a failed transaction that we had with PhilamLife. The purpose is to outline the role of the legal profession and also to address the issue of government entities and their contribution to consumer protection.

In late August 2008, an advertisement appeared in national broadsheets in which an insurance product, jointly marketed by PhilamLife and its Bancassurance partner BDO, and underpinned by AIG (PhilamLife’s parent company, headquartered in New York) as being “principal protected”.

The public did not know at the time, but some in AIG did, was that part of the firm, AIG Financial Products, had insured large amounts of mortgage-backed obligations. With mortgages defaulting in record numbers, the firm was facing cash calls for at least $85 billion (P4.25 trillion) that it did not have. The New York Federal Reserve Bank had, almost overnight, to lend AIG the money. Otherwise major financial institutions would also fail. Within weeks AIG needed a further $100 billion (P5 trillion). What Americans choose to call the global financial crisis (in reality it was largely an American crisis) had happened.

Not knowing that the AIG collapse was imminent (the public did not know), a family member purchased the advertised product at our BDO branch on Aug. 29, 2008. The money was paid, and the required formalities completed on this day. We did not receive a receipt but were told that the policy documents would be issued by Sept. 9. We never received them. And still have not.

It was six years later, in 2014, that we finally found out what happened. The local Pelac representative (Pelac being a joint PhilamLife (95 percent) and BDO (5 percent) venture had applied my signature to a quit-claim document dated Sept. 19, 2008 indicating that we were disengaging from the transaction. The reality was that by mid-September, having not received the promised policy documents, we were making appeals to BDO as to why we had not received them. We had no intention of disengaging from the transaction. We wanted it to happen. It appears that my signature was obtained from my BDO signature card and applied to the quit-claim form. Very naughty!

Later, PhilamLife charged us $1,000 (P50,000) for their failed transaction. Shame!

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Much later, in August 2016, I noticed an aggrieved letter in a local newspaper (not PN) which threatened to sue me for libel.

The letter, written by PhilamLife legal, accused me of making unfounded allegations. As the legal profession knows perfectly well, unfounded allegations can be true. For example, I had fish and rice for dinner last night (true) but it is an “unfounded allegation” because I cannot prove it.

In the real world, the truth is important. The legal profession, if it is to retain its standing in our society, should avoid silly sophistry.

With reference to the libel threat, Article 354 of the Revised Penal Code says, “Every defamatory imputation is presumed to be malicious, even if true, if no good intention and justifiable motive for making it is shown.”

My response is that I do have good intentions in that I do not want other people to experience what we suffered. The justifiable motive is that PhilamLife called us liars and we wanted to clear our name.

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In January 2015, I described the failed transaction to the Insurance Commission (IC). As a result, the then IC Commissioner, Emmanuel F. Dooc, asked Philam Life for their comments and to reply to me “within ten days”. No reply was received and my follow-up letter to IC was unanswered. PhilamLife legal later said “that no misconduct was found by IC”. This is misleading. IC did not carry out an investigation.

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I had a more productive dialogue with BSP’s legal officer. He attempted to arrange a voluntary mediation meeting between BDO and myself. I readily agreed to this but regrettably BDO did not. This was unfortunate as BDO would have learned that its Bancassurance hospitality had been abused. In fact, BDO disengaged from PhilamLife as its Bancassurance partner in 2009.

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What of the legal profession? What is its role in an industry that relies on probity? Is it to try to bury the truth? Or is it to find the truth?

Concealing transgressions does not help the insurance industry.

This makes the job of many excellent insurance representatives more difficult and causes the company to prosper less.

The legal profession has not been honored./PN