January 29, 2023
PPSTA building in Quezon City - Philippine Public School Teachers Association (PPSTA) Conservatorship Status Lifted

Philippine Public School Teachers Association (PPSTA) Conservatorship Status Lifted

Micro Insurance Philippines | Philippine Public School Teachers Association (PPSTA) Conservatorship Status Lifted | The conservatorship of the Philippine Public School Teachers Association (PPSTA) was terminated on August 30, 2022, due to the PPSTA’s fulfillment of the Minimum Guaranty Fund and Risk Based Capital (RBC) ratio criteria, as announced by Insurance Commissioner Dennis Funa.

 

Insurance Memorandum Circular (IMC) No. 2006-002 dated 24 April 2006 stipulates that PPSTA’s Minimum Guaranty Fund must be at least 12.5 million. The results of the audit of PPSTA’s Annual Statement as at 31 December 2020 confirmed that the organization met this criteria.

 

Also, IMC No. 11-2006, dated December 8, 2006, specifies a ratio between RBC and total assets, and PPSTA’s RBC ratio of 402% satisfies this requirement. According to the verified Annual Statement for PPSTA as of 31 December 2020, the Association has Total Admitted Assets of 7.02 billion, Total Liabilities of 4.46 billion, and Total Members Equity of 2.57 billion.

 

PPSTA is the largest and most significant professional association of public school teachers in the Philippines, representing more than 200,000 educators working for the Department of Education (DepEd). It was established on April 5, 1947. Through its loan, insurance, and retirement plans, PPSTA ensures the financial stability of Filipino public school educators.

 

“Notwithstanding the lifting of the conservatorship status of PPSTA, it remains subject to continuing compliance with the statutory and regulatory requirements of this Commission for mutual benefit associations (MBAs),” said Commissioner Funa after the conservatorship was lifted.

 

Furthermore, “Upon its exit from conservatorship, this Commission will be monitoring PPSTA’s observance of the Code of Corporate Governance for Insurance Commission Regulated Companies (CCG-ICRC) and the implementation of its digitalization program and its rationalization plan,” said Funa.

 

The purpose of Circular Letter No. 2020-71, dated 13 June 2020, was to adopt the CCG-ICRC, which aimed to bring the IC’s regulated firms’ corporate governance standards up to par with those of their regional and worldwide competitors. Newest G20/OECD Principles of Corporate Governance, ASEAN Corporate Governance Scorecard, and SEC Code of Corporate Governance for Publicly Listed Companies all had roles in the development of the CCG-ICRC (SEC).

 

The goal of PPSTA’s digitalization program is to boost the organization’s productivity through measures including the purchase of new IT hardware, the migration of existing systems, the fortification of existing IT security measures, and the education and training of current employees. Meanwhile, the Association’s rationalization strategy seeks to enhance the effectiveness of its services to its educator-members through the reduction of operational redundancies and overlaps and the development of more efficient processes and procedures.

 

As a result of PPSTA’s inadequate insurance reserves, the agency was put under conservatorship in April 2005. The Association’s RBC ratio improved from a negative 24% in 2013 to a positive 336% in 2019 and to a positive 402% in 2020, which is much higher than the minimum needed RBC ratio of 125%. In contrast to the negative (-) 115.77 million in Total Members Equity that PPSTA reported in 2013, the organization reported a positive (+) 2.57 billion in Total Members Equity in 2020.

 

This Commission selected Atty. Nasser A. Marohomsalic to serve as Conservator of PPSTA on January 3, 2018.

 

Photo from Wikimapia.