bplac 2013 annual report

BPI-Philam Life Assurance Corporation

BPI-Philam Life Assurance Corporation (BPI-Philam), on its fourth year, has secured its

position as one of the leading bancassurance companies in the life insurance industry. A

joint venture of Bank of the Philippine Islands and Philippine American Life and General

Insurance Company, BPI-Philam has proven that the combined synergy of the two largest

financial institutions in the Philippines is a formula of success.

In 2013, BPI-PHILAM made waves in the bancassurance industry as it generated

Premiums (net of reinsurance) of over P14.3 Billion and an increase of 25% versus

previous year’s P11.5 Billion. Increase sales in 2013 is attributed to the favorable market

sentiment and paved the way for the stronger take-up of the company’s unit-linked

products particularly its Single-Pay VUL products: Invest Plus Peso and Invest Plus

Dollar.

The two ‘on-the-shelf’ Single-Pay VUL products of the Company, Invest Plus Peso and

Invest Plus Dollar, which are linked to various BPI-AMTG Funds, generated P11 Billion

in Single Premium. This accounted for 77% of total premiums (net of reinsurance).

Regular-Pay premium sales continued to grow strongly, increasing by 72% from 2012.

This growth is attributed to the production from Build Plus Peso (a Regular-Pay VUL

product), which contributed P444 Million out of the P637 Million total Regular-Pay First

Year Premium production.

Total number of policyholders has increased in 2013 to over 160,000 a 12% growth over

previous year. Fee Income from VUL policies of P670 Million was significantly higher than

the previous year’s P431 Million. The increase of P240 Million was from higher Fees

received from Bank Partners given the growing volume of VUL funds of the Company.

The company’s achievement of record high growths can be attributed to the strong

relationship with its bank partner Bank of the Philippine Islands (BPI) as well as to its

comprehensive lineup of insurance and investment products.

Even as bancassurance is recognized as a significant contributor to Philam Life’s

business results, BPI-Philam has undertaken steps in 2013 to meet revenue goals and

sustainable growth objective. Initiatives such as strengthened human resources

complement, intensified sales and bank training programs, improved customer service

1


and launching of iPOS, an iPad application that allows paperless and straight-through

processing of new sales were put in place.

The skills and capabilities of the bancassurance sales force were further enhanced, which

reinforced bank staff trainings for better lead generation and referrals. Furthermore, the

notable improvement in bancassurance sales executives (BSE) productivity was due to

new variable pay incentive program and the re-tooling and up-skilling of sales teams. The

improvements in productivity and activity level, combined with the roll-out of next

generation unit-linked products resulted in strong growth from the bank’s various client

groups.

There were also several client appreciation and marketing activities, financial wellness,

learning sessions, investment forms and event tie-ups that increased the company’s

engagement to both clients and bank partners. Success of these initiatives is due to the

involvement and active participation of BPI’s Retail Segments and Channels Group.

Several partnership distribution initiatives with Philam Life that were started in 2013 are

expected to bring long-term benefits to the business. The installation of robust activity

management and leads generations systems throughout the sales force was put in place

to bring about discipline to drive best practices, and to maximize penetration of the bank’s

customer base.

The launch of iPoS during the latter part of 2013 is set to change the landscape of

insurance selling, and as the company moves towards 100% utilization in 2014 the full

positive impact on business growth is seen to be significant.

With continued support and stronger synergies from its parent companies, BPI and Philam

Life, BPI-Philam is expected to keep its growth momentum in 2014 as it continues to

provide insurance solutions that protect the financial well-being of its customers.

2


Financial Highlights (January to December 2013) BPI-Philam Life Assurance Corp. generated Premiums (net of reinsurance) of P= 14.3B in

2013, an increase of 25% over previous year’s P= 11.5B. Sales are attributed to the

production from Single-Pay VUL Products offered during the year, namely, Invest Plus

Peso, Invest Plus Dollar, and Max Growth Asia.

The two ‘on-the-shelf’ Single-Pay VUL products of the Company, Invest Plus Peso and

Invest Plus Dollar, which are linked to various BPI-AMTG Funds, generated P= 11B in

Single Premium. This accounted for 77% of total premiums (net of reinsurance). On the

other hand, Max Growth Asia, with three (3) tranches rolled out in 2013, generated P= 1B

in Single Premium. This accounted for 7% of the total premiums.

Regular-Pay premium sales continued to grow strongly, increasing by 72% from 2012.

This growth is attributed to the production from Build Plus Peso (a Regular-Pay VUL

product), which contributed P= 444M out of the P= 637M total Regular-Pay First Year

Premium production.

3


Revenues o Premiums

o Fee Income

Fee Income from VUL policies of P= 670M was significantly higher than the previous

year’s PhP431M.

The increase of P= 240M was from higher Fees received from Bank Partners given the

growing volume of VUL funds of the Company.

Benefits and Claims Expenses o Increase in Reserves

- Increase in aggregate reserves for life policies was higher by 20% than previous

year, from P= 9.8B to P= 11.8B, caused by the higher Single-Pay VUL production.

(Reserves for SP VUL policies range from 97% to 100% of the premiums).

o Insurance Benefits and Claims Expense

- Maturities and Cash Endowments increased in 2013 because there were more

policies that matured from the Old Block of business, particularly from EDP5 and

EDP10 products, which are Single-pay, dollar-denominated endowment products.

4


General and Administrative Expenses Acquisition and Operating Expenses increased by 53%, because of the following:

o Higher Manpower Costs

Increase from 2012 by P= 132M (or 36%) was due to (1) higher employee

headcount (567 vs 521 in 2012), mostly coming from the bancassurance sales

group, as well as (2) higher incentives to the In-Branch sales personnel, which

was driven by the sales growth and the more relaxed variable-pay scheme in

effect during the 1st half of 2013

o Higher Commissions

Increase by P= 212M (or 62%) was largely from Bank Service Fees, which grew

from P= 335M in 2012 to P= 551M in 2013. Such growth was a result of higher

production and a different sales mix of tranche and ‘on-the shelf’ products

(More ‘on-the-shelf’ products like ‘Invest Plus Peso’ with higher commission

rates than tranche products were sold in 2013).

o Higher Outsourcing Services

Increase by P= 160M was due to (1) higher Shared Services Agreement (SSA)

charges by Philam, attributable to the renewal of SSA rates, as well as the

bigger volume of transactions processed in 2013 vs previous year, and (2)

higher GOSF (Group Office Service Fees) charged by AIA, predominantly from

the Office of Partnership Distribution and Corporate Solutions.

o Higher Marketing Expenses

Increase by P= 41M was from the sales drives and campaigns launched by the

Company to boost its sales in the different distribution channels.

5


o Other Operating Expenses

Bulk of the increase in the other operating expenses came from the

contingency reserves that were set up by the Company related to its VUL fee

income since 2010.

Net Income for the Year Net Income for 2013 is higher by 94% than in previous year, mainly from the Realized

gains on investments for the year (P= 214M) and the Policy Dividend Cut implemented ( P=

150M).

The Company had gains from the sale of some equities (P= 95M), especially during the

second quarter of 2013 wherein the stock market performance was high. Such sale of

equities was done for rebalancing purposes and the execution of the Company’s

investment strategy. The Company likewise gained from the sale of investments in bonds

( P= 85M) and mutual funds (P= 34M), which was carried out primarily to meet its liquidity

requirements given the high maturities from its old block of business.

The cut in the schedule of policyholders’ dividends for Ordinary Life policies was put in

place to manage the Company’s interest rate risk exposure given the declining market

rates since the time the products from the old block of policies were initially priced and

launched.

Despite the high premiums generated from VUL, there was a corresponding increase in

reserves as well as acquisition and operating expense; consequently, direct premiums did

not contribute significantly to net income.

6


CAPITAL STRUCTURE

Authorized Capital Stock - P1Billion

Subscribed & Paid-Up Capital Stock - P749,993,979.00

Par Value - P1.00 per share

Treasury Share - P6,000

LIST OF STOCKHOLDERS

7


BOARD OF DIRECTORS AURELIO LUIS R. MONTINOLA III, 62 years old Non-Executive/Chairman of the Board

Aurelio R. Montinola III, 62, Filipino, is a Director of Bank of the Philippine Islands (BPI).

His other affiliations, among others, include: Excom and Board Member, Bank of the

Philippine Islands; Director, Ayala Land Inc.; Chairman, Far Eastern University; Vice

Chairman, Lafarge Republic, Inc.; Vice Chairman, Philippine Business for Education; and

Trustee, Makati Business Club.

He graduated with BS Management Engineering at Ateneo de Manila University in 1973.

He received his MBA at Harvard Business School in 1977.

He was awarded the 2005 and 2009 Asian Banker Leadership Award for the Philippines

and the 2006 CEO Excel Award for Communication Excellence in Banking and Finance,

and the 2012 Management Association of the Philippines (MAP) Management Man of the

Year.

His past affiliations include being President of Bank of the Philippine Islands for 8 years,

President of the Bankers Association of the Philippines for 4 years, President of the

Alliance Francaise de Manille for 7 years, and Trustee of the International School of

Manila for 4 years.

REX MA. A. MENDOZA, 51 years old Non-Executive Director/Vice-Chairman

Mr. Mendoza is the President and CEO of The Philippine American Life and General

Insurance Co. (Philam Life). He holds various positions within the Philam Group such as:

Vice Chairman of BPI-Philam Life Assurance Corporation (BPLAC), Chairman of the

Philam Equitable Life Assurance Company, Inc. (PELAC) and Chairman & President of

the Philam Foundation, Inc.

8


Previous to his current position, Mr. Mendoza was Senior Vice-President and Head of

Corporate Marketing and Sales Group of Ayala Land, Inc. He was a member of the

Management Committee of Ayala Land, Inc. and the Chairman & President of Ayala Land

International Sales, Inc.; President of Ayala Land Sales, Inc.; Chairman and President of

Rampver, Inc. and Rampver Strategic Advisors (RSA); Marketing and Training

Consultant; and Professor of De La Salle University, Graduate School of Business.

Prior to joining Ayala Land, Inc., he was Executive Vice President and Head of Sales,

Marketing and Training of PHILAM LIFE; Vice Chairman and CEO of Philam Asset

Management, Inc. (PAMI); Vice Chairman and CEO of Philam Financials; Director of

Philam Insurance Co., Security Philam, Philam Call Center and Philam Foundation.

He graduated with a Degree of Bachelor of Science in Business Administration, Major in

Marketing and Finance at the University of the Philippines, Diliman, Q.C., and took his

Masters in Business Management, with Distinction, at the Asian Institute of Management.

He is a Certified Investment Solicitor (CIS), Registered Financial Planner (RFP), and

Fellow, with Distinction, of the Life Management Institute at Atlanta, Georgia, USA. He

also completed the AIG Accelerated Country Management Program at AIG, NY, USA.

ARIEL G. CANTOS, 53 years old Executive Director/President & CEO

Ariel G. Cantos is the President and Chief Executive Officer of BPI-Philam Life Assurance

Corporation. Mr. Cantos is a member of the Board of Directors of the Philam Life Group,

sits as a Board of Trustee in Philam Foundation, Ayala-FGU Alabang and Ayala-FGU

Makati Condo Corporation.

Before his current appointment, Mr. Cantos was Senior Vice President and Chief Agency

Officer of Philam Life. He has had an enriching and successful career in Philam Life's

Agency Distribution Channel, which he served for close to 30 years. He held various

positions within the channel such as: Profit Center Head of Accident & Health Products;

Director of Manila Agencies; and Director of Provincial Agencies.

9


He graduated with a Bachelor's Degree in Economics, Honors Program, at the Ateneo De

Manila University, Loyola Heights, Quezon City.

JOSE L. CUISIA, JR., 69 years old Non-Executive/Director

He is presently the Ambassador Extraordinary and Plenipotentiary to the United States of

America and Vice Chairman of the Philippine American Life and General Insurance

Company (Philam Life). At present, he also holds the following positions: Chairman of The

Covenant Car Company, Inc.; Vice- Chairman of SM Prime Holdings; Director of BPI-

Philam Life Assurance Co., Holcim Philippines, Inc., PHINMA Corporation, ICCP Holdings

and Beacon Property Ventures. Before becoming Philam Life’s President and CEO for 16

years, Ambassador Cuisia served the Philippine Government as Governor of the Central

Bank of the Philippines and Chairman of its Monetary Board from 1990-1993. He was also

appointed Commissioner, representative of the Employer’s Group, for the Social Security

System (SSS) from September to December 2010. Ambassador Cuisia was also

Governor for the Philippines to the International Monetary Fund and Alternate Governor to

the World Bank. Prior to service in the Central Bank, he was Administrator and CEO of the

Philippine Social Security System from 1986- 1990. The Ambassador was previously the

CV Starr Chairman of Corporate Governance for the Asian Institute of Management (AIM),

a former Convenor-Trustee of the Philippine Business for Education (PBEd), Chairman of

the Board of Trustees/Board of Governors of AIM and former Trustee of the University of

Asia & the Pacific (UA&P), as well as the former Chairman of De La Salle University

(DLSU) Board of Trustees. In 2011, the Wharton Club of Washington, D.C. of the

prestigious Wharton School of the University of Pennsylvania presented the Ambassador

with the “Joseph Wharton Award for Lifetime Achievement” for an outstanding career in

the country’s banking and social security system. Ambassador Cuisia graduated from De

La Salle University with AB-BSC degrees (Magna Cum Laude) and earned an MBA

degree from The Wharton School, University of Pennsylvania in 1970 as a University

Scholar.

10


JESUS P. TAMBUNTING, 76 years old Independent Director

Ambassador Jesus P. Tambunting is the Chairman of Planters Development Bank

(Plantersbank), the country’s leading bank for Small and Medium Enterprises (SMEs).

Outside his activities in Plantersbank, Ambassador Tambunting is active in the

community, being Co-Chairman of the Philippine-British Business Council, member of the

Philippine-US Business Council, and member of the Board of Trustees of the Carlos P.

Romulo Foundation, PinoyMe Foundation, ABS-CBN Bayan Foundation, Makati Medical

Center Foundation and the Asian Institute of Management’s Ramon V. del Rosario, Sr. ---

C.V. Starr Center for Corporate Governance. He is a member of the Makati Business

Club National Issues Committee. From 2004 until May 2008, he served as Chairman of

the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), a

regional organization of 127 development banks and institutions in 44 countries. He was

elected to the Board of Directors of BPI-Philam Life Assurance Inc. in 2009.

Ambassador Tambunting served as the Philippines’ Ambassador Extraordinary and

Plenipotentiary to the United Kingdom of Great Britain and Northern Ireland from 1993 to

1998. At the same time he concurrently served as Ambassador to the Republic of Ireland

and as Permanent Philippine Representative to the International Maritime Organization.

Ambassador Tambunting held key positions in private institutions including as Chairman

of Hambrecht and Quist Asia Pacific and served as Director on the Board of Globe

Telecom, Inc. and the Makati Business Club, respectively. The Ambassador also had

stints as President of organizations such as the Philippine Ambassadors Foundation Inc.,

Management Association of the Philippines, Chamber of Thrift Banks, the Development

Bankers Association of the Philippines and the Manila Polo Club.

Ambassador Tambunting was conferred Master Entrepreneur and Entrepreneur of the

Year 2009 by Ernst & Young and the SGV Foundation, and inducted into the World

Entrepreneur Academy in Monaco in June 2010. He also received the International

Alumnus Award from the University of Maryland in April 2011, the first Ramon V. del

Rosario Sr. Award in Nation Building in 2010, the Distinguished Person of the Year 2009

11


from the Association of Development Financing Institutions in Asia and the Pacific , the

Management Man of the Year 2003 from the Management Association of the Philippines,

the Lifetime Achievement Award for 2005 from the Asian Bankers Association, the

Distinguished Service Award from the Department of Foreign Affairs and “Knight

Commander with Star” from the Equestrian Order of the Holy Sepulchre of Jerusalem in

2008.

The Ambassador earned his Bachelor of Science degree in Economics from the

University of Maryland. Prior to that, he had obtained his secondary education from the

Culver Military Academy in Indiana and his elementary education from the Ateneo de

Manila University. ROMEO L. BERNARDO, 59 years old Independent Director

Mr. Bernardo is Managing Director of Lazaro Bernardo Tiu and Associates (LBT), a

financial advisory firm based in Manila. He is also a GlobalSource economist in the

Philippines. He is Chairman of ALFM Family of Funds and Philippine Stock Index Fund.

He is likewise a director of several companies and organizations including Aboitiz Power,

BPI, Globe Telecom Inc., RFM Corporation, Philippine Investment Management, Inc.

(PHINMA), Philippine Institute for Development Studies (PIDS), National Reinsurance

Corporation of the Philippines and Institute for Development and Econometric Analysis.

He previously served as Undersecretary of Finance and as Alternate Executive Director of

the Asian Development Bank. He was an Advisor of the World Bank and the IMF

(Washington D.C.). Mr. Bernardo holds a degree in Bachelor of Science in Business

Economics from the University of the Philippines (magna cum laude) and a Masters

Degree in Development Economics at Williams College from Williams College in

Williamstown, Massachusetts.

12


ALFONSO L. SALCEDO, JR., 58 years old Non-Executive Director

Alfonso “Yogi” Salcedo, Jr. is the Executive Vice President and Head of Corporate and

Investment Banking Group of the Bank of the Philippine Islands. He steers the bank’s

lending business to Top Corporates, Middle Market, SME, Agriculture and Sustainable

Energy. Prior to his present position, he was the President of BPI Family Savings Bank,

the largest savings bank in the Philippines and a wholly owned subsidiary of BPI.

His other affiliations include: Chairman, BPI Leasing Corp., and BPI Rental Corporation;

Board Member: BPI Capital Corporation, BPI Direct Savings Bank, BPI-Philam Life

Assurance Corporation, BPI International Finance Ltd., Ayala Automotive Holdings

Corporation and National Reinsurance Corporation, among others.

Mr. Salcedo received his A.B. Economics Honors degree, with honors, from Ateneo de

Manila University in 1977. He also completed the Advanced Management Program at

Harvard Business School in 2006.

NATIVIDAD N. ALEJO, 56 years old Non-Executive Director

Natividad N. Alejo, Executive Vice President and Head of Retail Segments and Channels

Group joined BPI in 1979. She has been the Consumer Banking Group Head from year

2007 to present. She has also served as the President and Director of BPI Capital

Corporation and BPI Securities Corporation from 2001 to 2006. She has also served as

President of the Investment House Association of the Philippines in 2004 to 2006. She

also holds the following positions: Director of BPI Family Savings Bank, Inc., BPI Direct

Savings Bank Inc., BPI Operations Management Corporation, Beacon Property Ventures,

Inc., BPI-Philam Life Assurance Corporation, Santiago Land Development Corp., FEB

Speed International, Inc., International Finance Ltd., Shemberg Biotech, An Waray Party

List and a Private Sector Representative to the Board of Regents of Leyte Normal

University.

13


She graduated with AB Economics degree (Summa cum Laude and Gansewinkle

Scholastic Trophy Awardee) from the Divine Word University, Tacloban City in 1976. She

took up MA Economics at University of the Philippines in 1978 and completed the

Advanced Management Program at Harvard Business School in Fall of 2005.

JOSE TEODORO K. LIMCAOCO, 51 years old Non-Executive Director

Mr. Limcaoco is the President of BPI Family Savings Bank (“BFSB”), the consumer

banking arm of BPI and the largest thrift bank in the Philippines. He has served in this

capacity since 2010. Mr. Limcaoco is responsible for the bank’s consumer lending (retail

mortgage and auto loans), commercial loans to entrepreneurs and small businesses, and

card banking business.

Prior to BFSB, between 2007 and 2010, Mr. Limcaoco was President of BPI Capital

Corporation, the BPI’s investment banking arm. He is also concurrently a Managing

Director of Ayala Corporation and serves on Board of Directors of BPI/MS Insurance

Corp., BPI’s property & casualty joint venture with Mitsui Sumitomo Insurance; Ayala

Plans; and Philippine National Reinsurance Corporation.

Prior to joining Ayala Corp., Mr. Limcaoco headed the office of Barclays PLC in the

Philippines. His work experience before that included running the Asian currency

derivatives business for J.P. Morgan & Co. Inc. (“J.P. Morgan”) in Singapore and

developing capital markets risk management systems in New York. Before banking, Mr.

Limcaoco worked in the tech industry, as a programmer at VLSI Technology, a

semiconductor firm in Silicon Valley.

Mr. Limcaoco received a BS degree in Mathematical Sciences (Honors) from Stanford

University in 1984. He received an MBA from the Wharton School, University of

Pennsylvania in 1988.

14


ESTELITO G. MADRID, JR., 66 years old Non-Executive Director

Prior to his designation as Senior Advisor to the Regional CEO, Mr. Madrid was the

founding President and CEO of Pru Life UK (1996-2006) who later served as its Chairman

of the Board (2007-August 2012). He also served as President of Ayala Financial (1995 -

1996). He is a member of the board of directors of The Philippine American Life and

General Insurance Company (September 2012 – Present).

Mr. Madrid started his career as Section Manager of Proctor and Gamble before entering

the life insurance industry in 1971 as a professional career agent of Manulife Financial. He

later on became Sales Unit Manager in 1984 and Agency Director a year after in 1985

before becoming the First Filipino President of Manulife Financial.

He finished his BSC degree from De La Salle University in 1969.

TERRENCE CUMMINGS, 48 years old Non-Executive Director

Terrence Cummings is a Regional Director of Business Development in the Regional

Chief Executive’s Office of AIA, based in Hong Kong. Terrence has over 20 years of

international life insurance experience covering Asia, the Middle East, Europe, and North

America. Terrence has held senior management positions including Chief Operations

Officer, Chief Marketing Officer, and Chief Actuary with major multinational life insurers

and consulting firms. Terrence’s areas of practice include product development,

distribution, and marketing, operational efficiency, financial reporting, mergers,

acquisitions, and distribution agreements. Terrence is a Fellow of the Society of Actuaries

and a Member of the American Academy of Actuaries. Terrence holds a Bachelor of

Science in Actuarial Science from The University of Iowa.

15


Board Support Carla J. Domingo Corporate Secretary

Atty. Domingo is currently the Corporate Secretary and Vice President (VP) of The

Philippine American Life and General Insurance Co (Philam Life). She also serves as the

Corporate Secretary of BPI-Philam Life Assurance Corporation (formerly Ayala Life). As

part of her developmental plan, she was also seconded as Deputy Company Secretary of

AIA Group Company Limited in Hong Kong. Likewise, the Managing Trustee of Philam

Foundation, Inc.

She was Corporate Secretary to various Philam companies from 2008 –January 2014, to

wit: Philam Equitable Life Assurance Company; Philam Properties Group of Companies;

Philam Asset Management Inc.; Philam Call Center Services, Inc; the Tower Club, Inc.

and Philam Foundation, Inc.

Atty. Domingo is a member of the Integrated Bar of the Philippines, and a Fellow of the

Institute of Corporate Directors. Atty. Domingo was a graduate of the University of the

East, with a Bachelor of Arts degree major in Political Science, where she graduated

Magna Cum Laude. She took her Bachelor of Laws degree in San Beda, College of Law.

CORPORATE GOVERNANCE

The implementation of corporate governance principles is a priority of BPI-Philam.

Accordingly, the Board ensures compliance with IC Circular Letter No. 31-2005. Likewise,

the corporation submitted its Manual of Corporate Governance in compliance with IC

Circular Letter No. 21-2009. BPI-Philam aims to adhere to best practices on Corporate

Governance.

16


ROLE AND RESPONSIBILITIES OF THE BOARD The property, affairs and business of the Corporation are managed by the Board of

Directors. The Board is accountable to the shareholders and as such shall ensure the

highest standard of governance in running the corporation. The detailed role and

responsibilities of the Board are set forth in the By Laws and Manual of Corporate

Governance.

BOARD INDEPENDENCE The corporation has two (2) independent directors who meet all the requirements set in

the Manual of Corporate Governance. None of the independent director has any business

or significant financial interest in the company or any of its subsidiaries and therefore

considered to be independent.

BOARD PROCESS The Board meetings are held quarterly (scheduled at the beginning of the year) but

special meetings are called from time to time to discuss urgent matters. The Board

materials are sent to the members at least five (5) working days before the meeting.

Minutes of the Board and committee meetings are prepared and kept by the Corporate

Secretary. The minutes are open for inspection upon request on business hours.

ELECTION OF DIRECTORS The Corporation uses a transparent procedure for the election of directors which is

provided in the By Laws and the Manual of Corporate Governance. The Nomination

Committee looks into the qualifications of directors and thereafter presented to the Board

for consideration.

17


ORIENTATION PROGRAM AND TRAINING The Corporate Secretary provides the orientation for new directors to explain the

organizational profile, charters, by laws of the corporation. A corporate governance

seminar is arranged to ensure adherence to best practices.

PERFORMANCE EVALUATION The corporation has patterned its performance evaluation to Philam Life, the criteria of

which are based on the Insurance Commission circular on corporate governance. Every

April of each year, the Board conducts a self-assessment of the Board and its Committees

as well as the Chairman & President.

BOARD COMMITTEES

Rex Ma. A. Mendoza Chairman Arleen May S. Guevara ChairpersonJose Teodoro K. Limcaoco Vice-Chairman Ariel G. CantosAriel G. Cantos Jesus P. TambuntingEstelito G. Madrid, Jr. Natividad N. AlejoNatividad N. Alejo Jose Teodoro K. LimcaocoAurelio Luis R. Montinola III* Tisha T. Darvin*as alternate for Mr. Limcaoco & Ms. Alejo Spencer T. Yap

Rex Ma. A. Mendoza Chairman Rex Maria A. Mendoza ChairmanJesus P. Tambunting Aurelio Luis R. Montinola IIIAurelio Luis R. Montinola III Jesus P. Tambunting

Romeo L. Bernando Chairman Jose Teodoro K. Limcaoco ChairmanEstetlito G. Madrid, Jr. Alfonso L. Salcedo, Jr.Jesus P. Tambunting Jesus P. Tambunting

Ariel G. CantosTerrence Cummings

Executive Committee

Audit Committee

Investment Committee

Nomination & Governance Committee Compensation/Remuneration Committee

Board Risk Committee

18


CORPORATE OFFICERS

Aurelio Luis R. Montinola III - Chairman of the Board

Rex Ma. A. Mendoza - Vice-Chairman

Ariel G. Cantos - President & CEO

Spencer T. Yap - Treasurer and Chief Finance Officer

Carla J. Domingo - Corporate Secretary

Ace Devino A. Custodio - Asst. Corporate Secretary

SENIOR OFFICERS

Arleen May S. Guevara - SVP-Investment Officer

Andreas Rosenthal - Senior Vice-President

Amelita M. Intalan - FVP-Treasury

Tisha T. Darvin - Chief Actuary

Margaret G. Manlapas - FVP Policy Owners’ Administration

Ione Fay S. Canto - VP and Chief Compliance Officer

Amante R. Cruz - VP & Medical Director

Joseph G. De Dios - VP for Internal Audit

Karen Custodia - Head of Marketing

Monica Bondoc - Head of Human Resources

Ana Amelia T. Gochuico - Head of Operations and Strategic Initiatives

Maxima Linda C. Galido - Head of Sales Training and Development

BOARD MEETINGS

The Board had six (6) meetings in 2013 and the directors received the materials at least

five (5) working days in advance. The presence of at least six (6) directors with at least

one (1) director from BPI and Philam Life present is necessary to have a quorum.

The number of meetings held in 2013 and the overall attendance rate is:

19


Board of Directors met six (6) times with overall attendance rate of 81.81%.

The Audit Committee met four (4) times with an attendance rate of 75%.

The Nomination Committee & Governance Committee met once with an attendance rate

of 100%.

The Remuneration Committee met once with an attendance rate of 100%.

RETIREMENT BENEFIT

The company has a defined benefit plan. The amount of retirement benefit that an

employee will receive upon retirement usually depends on one or more factors such as

age, years of service and compensation. Retirement cost is actuarially determined using

the projected unit credit method.

SHARE BASED PAYMENT

AIA GL launched a number of share based compensation plans, under which the

corporation receives services from the agents, employees, directors and officers as a

consideration for the shares and/or options of AIA GL.

RELATED PARTY TRANSACTIONS

Related Party transactions exist and details of which are provided in Note 27.1 of the

Audited Financial Statement.

20


RISK MANAGEMENT

Over the past two (2) years, a number of key policies and operational risk management

components have been implemented across the corporation. The following tools were

implemented: Risk Control Self Assessment (RCSA) and Risk Event Capture and

Analysis Process (RECAP). On a quarterly basis, the monitoring of the results of RCSA is

reported to the Risk Management Committee which includes discussion on the RECAP. In

progress is the creation of the Key Risk Indicators (KRI) dashboard.

CORPORATE POLICIES

The BPI-Philam Life Assurance Corporation (BPLAC) corporate policies include, among

others:

AIA Code of Conduct that provides for the ethical guidelines for conducting business on

behalf of AIA companies, of which Philam Life is a member. It specifies:

a.) The duty to safeguard material non-public information from improper use. The

Insider Trading Policy provides for the details on how to deal with such

information.

b.) Commitment to conduct the business in a manner that protects the health, safety

and security of employees, customers and other stakeholders.

c.) It seeks supplier partnership with diverse businesses.

d.) Not to use improper means to influence another’s business judgment. NO

employee, agent or independent contractor may provide bribes or other improper

benefits to another person in order to obtain or retain business or an improper

advantage in any business. A separate Anti-Corruption and Anti-Bribery policy

have been crafted to guide on persons concerned.

21


e.) Adheres to AIA Group Whistle Blower Protection Policy which provides a

procedure for filing and addressing complaints of retaliation for whistle blowers

who make disclosures concerning improper or corrupt conduct. The details of

which are in the Whistle Blower Protection Policy.

CORPORATE SOCIAL RESPONSIBILITY

BPI-PHILAM is a member of Philam Foundation, the corporate social responsibility arm of

the Philam Group. It is our aim to promote Healthy Education through its flagship project,

Philam Paaralan. With the said project, the company helps the Department of Education

in classroom building in underserved and/or calamity stricken areas in the country.

Philam Foundation has a KaAkbay Philam Volunteer Corps program which continues to

support and encourage Philam Group employees to join various advocacies through its

various activities like, Brigada Eskwela, Tree planting etc.

22

bplac 2013 annual report

Documents