BACOLOD CITY — We wrote here last week that the economic meltdown in the U.S. was caused by greed. Retired World Bank and later Asian Development Bank executive Jesus Zarandin, who came to Bacolod planning to spend his retirement years here, said greed was aggravated by the financial markets not worrying about the risks and therefore didn’t mind regulations.

There was the housing frenzy with everybody wanting to invest in housing projects and borrowing money at even a higher value than the cost of the house, hoping the cost of the house would go up.

Zarandin called it banking on hope. And regulations were not given much attention because business was good.

Mortgages were done with little or not enough collateral. They should have not been given in the first place. There was difficulty in collection.

Insurance companies fell too, especially the American Insurance Group where seven big insurance companies in the Philippines were connected.

Regulations on insurance operation were eased too in the face of an economic boom.

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We have noted that except for the big insurance companies in the Philippines, the small ones did not prosper. The reason has been that the regulations on them were not correctly enforced.

Many lost trust in life insurance when on the death of the insured, the beneficiaries could not collect. If they could, it was only after putting up a fight.

I am not insurable now. But ever since I was 25 when insurance salesmen started trying to sell me life insurance I never did get one. No insurance salesman had successfully convinced me.

I once taught a subject on insurance and it was there I found out the risk in taking life insurance is great, especially if you read carefully the fine print in the policy. You find out your beneficiaries cannot win.

Also because the Insurance Commission does not have the full control of insurance companies to make them strictly follow regulations. Well, I said it, there are good insurance companies, reliable and financially sound.

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Same case with non-life insurance companies. There are many good ones. But get only from insurance companies you can trust.

But the worse is the experience of many, hundreds of thousands who were victims of pre-need companies. Pre-need companies work like insurance firms. After they amassed millions and millions of funds, they declared bankruptcy. And so far none of their officials went to jail. Not one did I hear.

Imagine the problem of the thousands of poor families who paid to have a college education for their children. Then later to be told, the company could not pay because it was bankrupt! And the government could not do anything.

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While teaching in college I was head of a faculty club. We were convinced to have a group insurance and the selling point was we did not have to get a medical examination.

A member’s wife died. She was dean of the Graduate School of UNO-R. The insurance company would not pay because her illness was not reported. The requirement to report an illness was not stipulated in the agreement because it was done verbally.

I was then editing a weekly paper. I threatened to expose them and this would drive them out of Negros. Their officials in Manila came, gave our faculty officials a dinner at Sea Breeze Hotel and paid the insurance which was only P2,000. But it was in the 60s. And they said, they spent more on their trip here. I agreed never to write about it anymore. That is an example of the problem with insurance companies here.

I hope people’s trust in insurance firms returns. And the solution here is simple, government. The agency supervising insurance companies should do its job. But, I am afraid with the millions insurance companies earn, they could bribe insurance officials in government.

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Yes, Vic Mercado, my friend. Keep up with your fight for the protection of hapless Filipinos victimized by greedy insurance companies.

Vic has a streak of genius as a radio man. His grandfather, I heard, was an illegitimate son of our national hero, Jose Rizal whose real name was Jose Alonzo Mercado, son of Francisco Mercado and Teodora Alonzo.

Note: E.B. Magalona Police Chief Melvin Matulac was acquitted by the court of illegal possession of firearms. He was defended by my friend, Rene C. Depasucat.

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