June 24, 2008

Asian Spirit flying without insurance

(Photo from Boracay Budget Travel Tips)

Asian Spirit, the carrier of businessman/banker Alfredo Yao, is flying amid questions about its insurance cover.

A source at Prudential Guarantee and Assurance Inc. confirmed that it is no longer the airline’s insurer as of June 18.

A check with the Civil Aeronautics Board (CAB) shows, however, that Asian Spirit has not submitted any new filing to show any change in its insurance company.

An official of Prudential Guarantee said Asian Spirit has “no insurance at the moment…. Asian Spirit has rescinded the policy of Prudential by declaring that it is no longer their authorized insurance company.” The official who requested anonymity said an airline insurance policy usually is contracted annually, “so they [Asian Spirit], pre-terminated their insurance [with Prudential].”

The official made this statement in reference to a letter written by Asian Spirit chief finance officer Albert S. Toribio entitled “Appointment-Sole & Exclusive Broker on Record” on June 18, a copy of which was obtained by BusinessMirror, designating “Empire Insurance Co. Inc., as the exclusive insurance company of Asian Spirit for its Aviation, Hull & Liability, Deductible, War, Personal Accident and other aviation-related insurance requirements.”

Toribio added: “We also confirm our understanding that Empire Insurance Company Inc. has appointed Asian Reinsurance Brokers Pte. Ltd. as Empire Insurance Company Inc.’s exclusive Reinsurance Broker in London for Asian Spirit aviation insurance requirements.

“This appointment of Empire Insurance Company Inc. and Asia Reinsurance Brokers Pte. Ltd. rescinds all previous appointments until cancelled in writing.”

Following the letter of appointment of Toribio, Prudential Guarantee wrote Toribio on June 19, a copy of which was obtained by BusinessMirror, saying: “By your unilateral action of appointing another insurance company from the 18th of June 2008, you have in fact rescinded your insurance contract with Prudential Guarantee and Assurance Inc. and therefore there is no insurance policy in effect from the date of issuance of your letter.” (Read the rest here)

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Here are the pertinent documents I used as basis for this report, aside from my extensive interviews with officials of Prudential Guarantee, the CAB, Asian Spirit, Empire Insurance, and the Insurance Commission.

Rescision of Prudential Guarantee contract asian spirit rescision.pdf

Acknowledgement of Prudential Guarantee that it is no longer AS insurer File0291.PDF

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