2012 President’s Report

2012 was when the country reaped the benefits of a sound economic program and fostered a promising economic outlook for 2013. For Knights of Columbus Fraternal Association of the Philippines, Inc. (KCFAPI), it was another excellent year as it continued to surpass its goal with its cutting edge benefits and services to Knights of Columbus members and families.

Under the guidance and wisdom of our Board of Trustees and the resilience of officers and staff in meeting the demands of a challenging global economic environment, your Association stood to meet the year’s trials to emerge stronger and be more stable in ensuring the welfare of the Knights of Columbus family during difficult times or during the demise of a loved one through fraternal coverage.

It is with great pride that I present to you how KCFAPI faced these challenges and achieved an exceptional performance in 2012. Let me describe them in detail.

PROVIDING FRATERNAL SERVICE

Your Association, in its commitment to provide fraternal protection to KC families throughout the country, extended coverage to a total of 63,990 Brother Knights and family members with regular plans and Council Mortuary Benefit Plan (CMBP) in 2012. This is 4.4% higher than the 61,275 covered members during the previous year. This translates to Total Protection Benefits amounting to P11.7 Billion, a 9.2% increase from P10.7 Billion in 2011.

A total of 7,627 new lives were covered with regular plans, resulting to First Year Contribution (FYC) of P138.3 Million, 8.9% higher than P127.0 Million recorded FYC in 2011 and the highest ever attained by your Association in its 54 years of existence.

Eight hundred fourteen (814) councils availed of KCFAPI’s group plan, the CMBP, which offers affordable rates that highlight the social dimension of the Association. The 44,180 total enrollees under this plan exceeded 2012 target by 3.0% and the previous year’s record by 10.0%. The CMBP contributed P20.9 Million to total underwriting revenue as it surpassed the target of P18.7 Million by 12.0%.

Total Living and Death Benefits released to Benefit Certificate Holders in 2012 amounted to P310.1 Million, 5.8% higher than P293.0 Million in 2011. This includes P79.76 Million and P123.5 Million worth of Death Benefits and Maturity claims, respectively.

KCFAPI takes pride in being the only life insurance organization with unprecedented record in fast claim settlement service.
By year end, KCFAPI was able to register P394.9 Million Renewal Year Contribution, a 9.8% increase from the previous year’s P359.8 Million.

To recognize the unselfish efforts of your Association’s field representatives in promoting awareness and extending benefit privileges to all KC families, two brother knights excelled and emerged victorious in the 36th Fr. George J. Willmann, SJ – Annual Family Service Awards, which was held in Puerto Princesa City, Palawan last March 8, 2013. Bro. Salvador R. Aspuria, Sr. of the Cordillera Braves was the adjudged runaway winner of the coveted title, “Area Manager of the Year”. Bro. Aspuria was also last year’s titleholder. The Fraternal Counselor of the Year Award went to Bro. Rodante B. Sultan of the Eastern Visayas (EV) Fighters with over P5.1 Million in FYC.

CONTINUED COMMITMENT TO EXCELLENCE

KCFAPI has the distinction of being the first fraternal mutual life insurance system organized in the Philippines. As a testament of its commitment to provide quality service, your Association continues to be ISO certified for the sixth (6th) straight year under the strict standards of Certification International (CI). The certification proves that KCFAPI’s Quality Management System (QMS) is in conformance with the requirements of ISO 9001:2008 with the scope of design, development and provision of mutual benefits. ISO 9001: 2008 is also a tool to enhance ways of exceeding customer needs and expectations.
Your Association has continuously embarked on fortifying its customer relations management (CRM) programs. It envisions to synergyze Technology, Organization and Personnel in providing customer delight to each valued Benefit Certificate Holder.

In 2011, KCFAPI successfully implemented the online connectivity of its Home Office to all six (6) Service Offices. To reap the full potential of this connectivity, your Association has installed the Digital-Analog-Digital (DAD) System phone device. This technological improvement promises better and cost-effective service through enhanced communications among KCFAPI offices.
Your Association sees to it that it is always in touch with the general public especially the KC family through the various media such as the Cross Supplement of the CBCP Monitor, KC website and the podcast.

FINANCE & INVESTMENTS

Your Association efficiently managed its resources and use of funds to settle benefit claims and remained committed in fulfilling its social responsibility despite the economic challenges in 2012 specifically the continued downtrend in interest rates.

For the year ended 2012, your Association exhibited a modest 7.7% growth in its total resources from P3.6 Billion in 2011 to P3.9 Billion in 2012 with investment yield of 7.19%. Maintaining its conservative stance, majority of the investments are in government securities and other fixed income securities.
Your Association efficiently managed its operations as KCFAPI posted an excess of revenue over expenses amounting to P70.4 Million, with unprecedented record of increasing annual participation in earnings of each member and family. A total of P35.0 Million will be released to eligible Benefit Certificate Holders in 2013 as their participation.

Demonstrating an established strong financial base, KCFAPI recorded a Risk Based Capital (RBC) ratio of 203.2%, which is higher than the 150.0% required from the mutual benefit associations as prescribed by the Insurance Commission (IC).

Fulfilling its social responsibility, your Association extended P8.2 Million as contribution to benevolent causes. The amount includes support to its Foundations and other religious organizations to carry out their missions.

WHOLLY-OWNED OR MAJORITY-OWNED COMPANIES AND FOUNDATIONS

Serving both KC families and non-KC members are Keys Realty and Development Corporation (Keys Realty) and Mace Insurance Agency, Inc. (Mace), your Association’s wholly-owned or majority-owned companies.

Keys Realty and Development Corporation, a majority-owned company of your Association, is engaged in buying and developing real estate for sale or lease and in mortuary services. Its total assets for the year 2012 amounted to P434.6 Million from P356.8 Million in 2011 and its total stockholders’ equity have grown to P348.2 Million from P329.7 Million during the previous year. Its growth in its total assets and total stockholders’ equity attests that Keys Realty is continuously expanding and strengthening its core line of business. Keys Realty posted a net income of P26.3 Million, 40.4% higher than the previous year’s P15.7 Million. It remitted a total dividend of P7.6 Million to KCFAPI during the year from its 2011 net income.

A division of Keys Realty, the Holy Trinity Memorial Chapel and Crematorium (HTMC) offers the best facilities both for chapel and outside viewing for the deceased and the bereaved KC families and the general public. The expansion of its chapels was a timely investment to highlight its celebration of thirty years of providing memorial care.

Mace Insurance Agency, Inc., on the other hand, is a wholly-owned company of KCFAPI which is primarily engaged in general nonlife insurance coverages. It posted 5.3% growth in assets, from P7.9 Million in 2011 to P8.4 Million in 2012. By year end, Mace declared and released dividends amounting to P655 Thousand based on its 2012 performance. Mace Insurance continues its partnership with reliable non-life insurance providers which offer Fire and Motor Insurance, Personal Accident and Medical coverages, Fidelity Guarantee, Marine Cargo and Hull, among others.

KC Philippines Foundation, Inc. (KCPFI) is one of the two foundations established by your Association to fulfill its corporate social responsibility. KCPFI’s primary focus is to provide collegiate scholarships to poor but deserving students. Other worthy endeavors included giving assistance to victims of calamities nationwide, funding housing units for the homeless families in partnership with the Gawad Kalinga and organizing livelihood programs to enhance income-generating capabilities.

For school year 2011-12, ten (10) scholars proudly completed their respective collegiate courses including Ms. Mary Anne Jelli Gaza, who graduated Magna Cum Laude from UP Diliman and a 5th placer in the October 2012 Certified Public Accountant (CPA) licensure examination; and Mr. Francis Ryan Parcasio who graduated Cum Laude from MSU-General Santos. With the latest graduates, your Association now boasts of an accumulated total of 277 collegiate scholar-graduates. In addition, the Foundation to date also has a total of 114 graduates of vocational scholarships and one high school scholar-graduate.

In 2012, KCPFI awarded collegiate scholarships for school year 2012-13 to thirteen (13) youths based on the three main criteria of: 1) hurdling the KCPFI qualifying exam, 2) financial need and 3) scholastic track record, resulting to a total of eighty (80) current scholars for the school year 2012-13.

It was likewise in 2012 that the Board of Trustees of the Foundation approved to adopt a different strategy for KCPFI’s operations and seek accreditation as a Donee-Institution from the Philippine Council for NGO Certification (PCNC). Once accredited, an influx of non-traditional supplementary funds is projected to come to KCPFI from donors that will then enable the Foundation to pursue other socially-relevant projects in addition to offering more collegiate scholarships to other qualified high school graduates.

The Knights of Columbus Fr. George J. Willmann Charities, Inc. (KCFGJWCI) is the other corporate social responsibility arm of the KCFAPI, focused primarily on providing religious scholarships for the vocation of selected diocesan priests and seminarians.

In 2012, KCFGJWCI sponsored the 8th Gathering of Priests at Galilee Mansion and Resort, Bustos, Bulacan. This special gathering was arranged to coincide with the schedule of KC National Convention to promote camaraderie among KC priest scholars.

The KCFGJWCI was able to secure from the PCNC in April 2012 its initial accreditation as a Donee-Institution. With its recent accreditation as Donee-Institution, the Foundation hopes to generate more funding for its religious scholarships to support our priests and those with priestly vocations.
It was also in 2012 that the Board of Trustees of the Foundation formally conceptualized to provide hospitalization assistance to its KC Priests. Fund-raising activities, to include “Bingo for a Cause” in July 2012 and a Dinner-Dance for a Cause in September 2012 generated about P723,000. To date, the Board has approved the implementation of said Hospitalization Assistance Package.

The following summarizes the scholarship grants to beneficiaries of the two Foundations:

CURRENT SCHOLARS (2012-2013) = 107
Theology 20
Collegiate 75
Licentiate – Local 8
Licentiate - Rome 4

GRADUATED SCHOLARS = 579
Ordained Priests (Theology) 123
Ordained Deacon (Theology) 4
Waiting for Ordination (Theo Grad) 15
Licentiate – Local 21
Licentiate - Rome 24
Collegiate Scholarship 277
Vocational Scholarship 114
High School 1

GOOD CORPORATE GOVERNANCE & RISK MANAGEMENT

Being a staunch advocate of accountability, transparency and integrity in service to our BC Holders, the Board of Trustees, officers and staff of KCFAPI remain committed to the principles and best practices of good corporate governance to attain its corporate goals and objectives. True to its advocacy, KCFAPI regularly submits to the Insurance Commission its corporate score card and report on the compliance to corporate governance principles and leading practices.

Manual on Good Corporate Governance

To ensure that operational effectiveness of the company is maintained, review and enhancements beneficial to its stakeholders are regularly undertaken by KCFAPI. The Manual on Good Governance is regularly re-examined to ascertain that the existing management practices are within accepted norms and standards on corporate governance.

The compositions of the Board of Trustees are balanced to ensure that decisions are conducted in fair and reasonable manner. Each member elected to the Board is a highly dedicated member of the Order of the Knights of Columbus and possesses the professional expertise, competence and experience needed in guiding KCFAPI towards achieving its corporate goals. To uphold the impartiality of the Board, membership includes two independent trustees, namely Bro. Emiliano R. Deleverio and Bro. Juan Abraham O. Abando.
In conformance to the requirements of regulatory agencies, such as the Insurance Commission, KCFAPI submits a Corporate Governance Score Card to attest the integrity and competence of the members of the Board of Trustees in the discharge of their duties.

Code of Ethics

In July 2012 the Board of Trustees renewed its vow to practice and uphold the provisions embodied in the revised KCFAPI Code of Ethics. The Code sets the standard of integrity, conduct and morality for Members of the Board of Trustees, officers, staff, field representatives of KCFAPI and outsourced services in the business dealings of the Association with the public. Accordingly, KCFAPI’s wholly-owned or majority-owned companies and Foundations followed suit in renewing the vow to ingrain the Revised Code of Ethics as part of their corporate policy.

Risk Management

Despite the country’s economic successes, the evolving global climate and ensuring financial fiasco in the international market affecting the livelihood of our brother knights leaves no room for complacency in such events. In the light of these phenomena, your Association continually upgrades the KCFAPI-Wide Risk Management (KWRM) program and integrates it to the Quality Management System (QMS) to provide reasonable assurance regarding achievements of its goals and objectives amid uncertainties brought about by the unpredictable environment. This is KCFAPI’s pro-active approach in managing threats identified in its operations to protect the Association and the interest of Benefit Certificate Holders.

TALENT MANAGEMENT

KCFAPI takes pride in its human resources and recognizes that the growing availment rate of the benefits and services being offered by the Association as manifested in its bottom line in 2012, is highly attributed to the employees’ commitment to provide optimum fraternal benefits to the Benefit Certificate Holders. Thus, your Association sees to it that opportunities for empowerment and career development are continually given to its 66 strong workforce.
KCFAPI invested on a three-day Association-wide training entitled “Unleash the Highest Potential of your Life and Work”. The training, aimed at unleashing the highest potential of KCFAPI employees’ life and work towards success, happiness and significance, purposefully encouraged the participants to have a determined will to give their 100% in everything they do both in private life and work life. The experience of combining the officers with the supervisors and staff during the 3-day training intensified the culture of dedication, commitment and teamwork among them.

Consistent in its efforts in promoting continuous learning and career growth, your Association provides LOMA Education program to its employees. Life Office Management Association or LOMA is an employee training and development association based in the US, widely known as the leading provider of learning solutions for life insurance companies in over 70 countries worldwide. To date, there are 8 employees who have gained designation as Fellow, Life Management Institute (FLMI); 7 Associate, Life Management Institute (ALMI); 5 Professional, Customer Service (PCS); and 8 Associate, Customer Service (ACS).

Your Association has long recognized the importance of having a healthy balance between work and personal life. This is why KCFAPI continuously provides opportunities throughout the year for employees to relax and bond with co-workers and their respective families outside the office environment thru the various company-sponsored activities. Employees and their families got the chance to frolic under the sun during the summer outing held at Bosay Resort in Antipolo, Rizal. Food, fun games and prizes were likewise provided for the enjoyment of employees together with their spouses and children during the Family day held at the KCFAPI Home Office in Intramuros. KCFAPI employees also went on a Pilgrimage of Faith in Bataan, where they got the chance to visit the various churches in the said province. Wearing their gowns, tunics and mantles, KCFAPI employees celebrated the Christmas season in a centuries-old way at the Manila Grand Opera Hotel with the theme, “KCFAPI Christmas in Medieval Times”.

SOLIDARITY WITH THE CATHOLIC CHURCH, THE ORDER OF THE KNIGHTS OF COLUMBUS AND OTHER COMMUNITY SERVICES

In addition to the two Foundations, your Association exercises its corporate social responsibility by participating in initiatives promoted by the Catholic Church, the Order of the Knights of Columbus, and being involved in other relevant activities of the community.

In November 2012, KCFAPI joined the estimated 2,000 devotees in welcoming the pilgrim image of San Pedro Calungsod in Manila Cathedral. Your Association sponsored the construction of the “Urna” that carries the image of the new Filipino saint and extended cash donation to the National Commission on the Canonization of Blessed Pedro Calungsod, headed by former Chief Justice and KCFAPI Chairman, Hilario G. Davide, Jr. to help in its programs and activities.
KCFAPI also started supporting the television program “The Word Exposed” of His Eminence Luis Antonio G. Cardinal Tagle by extending regular monthly financial assistance. The Word Exposed is an early Sunday morning program where Cardinal Tagle, as host, tackles the Gospel for that particular day, fully explaining its meaning and relevance to a wider audience.

In 2012, your Association turned over P747,000 interest income from the CBCP Seed of Hope Fund, a fund set up by KCFAPI, interest of which shall be awarded each year for the priority projects of the Catholic Bishops’ Conference of the Philippines (CBCP). Total grants turned over to CBCP representing total earnings from the fund for the past four years have reached P3.1 Million.
In support of strengthening the Catholic faith through literature, your Association extended budget for printing 1,000 copies of Spiritual Formation Course Book and 20,000 copies of Year of Faith Primer. (In March 2013, another 20,000 copies were printed.)

Steadfast alongside the Catholic Church in defending the sanctity of life, KCFAPI joined thousands of other participants in the Walk for Life to reiterate its stand against the Reproductive Health (RH) Bill.

Your Association actively participates and supports various activities and events of the Knights of Columbus in the country and abroad. KCFAPI supported the celebration of the 9th National Convention held in April 2012 in Manila; and in August last year, your Association’s selected officers headed by its Chairman former Chief Justice Hilario G. Davide, Jr. participated as delegates to the 130th Supreme Convention held in Anaheim, California, joining more than 30 KC Philippines attendees.

The Gift Giving Committee, composed of KCFAPI employees, and whose primary objective is to raise funds to reach out to our less fortunate brothers and sisters, was able to gather enough donations from generous donors within and outside the Association. Proceeds were distributed as Christmas gifts to the young cancer patients housed in the Philippine General Hospital in Manila and the residents of the Missionaries of Charity in Tayuman.

Celebrating life, your Association also participated in the commemoration of the National Disability Prevention and Rehabilitation Week in its 34th anniversary.

KCFAPI also provided calamity assistance to the flood victims in Compostela Valley and Davao Oriental strategically coursed thru the Mindanao Jurisdiction of the Order.

9TH KNIGHTS OF COLUMBUS NATIONAL CONVENTION

In April last year, KCFAPI supported the prestigious nationwide gathering of Brother Knights, the 9th Knights of Columbus National Convention with the theme “So That The World May Know New Hope”. Held in the capital City of Manila, Supreme Knight Carl Anderson, together with his lady, Dorian, visited the country as the keynote speaker and attended a series of related activities during the three-day event.

Nearly 2,000 delegates and their families from the Luzon, the Visayas and Mindanao Jurisdictions gathered at the Manila Hotel for the convention’s opening business session to hear the reports from Knights of Columbus leaders and inspirational addresses by members of the church hierarchy. The annual reports of the three state deputies were delivered during the convention by Bros. Arsenio Isidro G. Yap of Luzon, Rodrigo N. Sorongon of Visayas and Balbino C. Fauni of Mindanao. Focusing on membership growth and works of charity, they narrated the story of the Knights in their jurisdictions according to the six categories of the Order’s “Surge with Service” program: Church, Family, Council, Community, Youth and Pro-Life.

Hope for a better family life was highlighted in the Fathers for Good Philippines Award, a national honor that was conferred for the first time. The award is patterned after the Fathers for Good initiative that was launched by the Supreme Council in August 2008. The three winners of the Philippine award were selected from more than 186 candidates who were nominated by their councils: Bros. Alfredo Lallana of Luzon, Gerardo Gamposilao of Visayas and Rosalio Ferilo of Mindanao. The winners were chosen by a group of highly distinguished board of judges composed of KCFAPI Chairman Hilario G. Davide, Jr., KCFAPI President Guillermo N. Hernandez, State Deputies: Arsenio Isidro G. Yap - Luzon, Rodrigo N. Sorongon - Visayas, Balbino C. Fauni - Mindanao, KCFAPI EVP Ma. Theresa G. Curia, K of C Spiritual Director Msgr. Pedro C. Quitorio III plus two independent jurors: Dr. Jesus P. Estanislao and Sr. Mary Pilar Verzosa (+) based on the Order’s principle of Charity, Unity, Fraternity and Patriotism.
Archbishop Jose Palma of Cebu, President of the Catholic Bishops’ Conference of the Philippines (CBCP), blessed three sites dedicated to the Knights of Columbus founder: a multimedia studio at the CBCP headquarters, a monumental cupola for a statue of Father McGivney outside the headquarters of KCFAPI and an oratory inside the KCFAPI headquarters. Three pilgrim statues of Father McGivney, founder of the Knights of Columbus, were also blessed during the event. The statues were transported to the offices of the three Philippine Jurisdictions.

The convention concluded with a Memorial Mass for all deceased members of the Knights of Columbus in the Philippines, led by Bishop Honesto F. Ongtioco of Cubao, Luzon State Chaplain.

FOCUSING ON THE FUTURE

Indeed 2012 was the year KCFAPI and its wholly-owned and majority-owned companies thrived with blessings as it persistently surpassed its targets and expectations. The growing availment of the benefits and services offered by KCFAPI, and its wholly-owned and majority-owned companies, attests the overwhelming trust and confidence our stakeholders espouse and which we highly regard. For what we are now, as a leading mutual benefit association, we owe it to the vision, confidence and support of the Board of Trustees, the dauntless dedication of the management, staff and field representatives in rendering incomparable service to Brother Knights and their immediate families.

As we move towards the year 2013, and in line with the Vatican’s declaration of the “Year of Faith”, KCFAPI and its wholly-owned and majority-owned companies adopted the theme “Proclaiming and Celebrating Faith” on our conviction that through our services we become an instrument in proclaiming and celebrating our faith in God and the Church. By developing far superior benefits and continually enhancing fraternal services to our Brother Knights, we are committed in outperforming past achievements as your leading provider of fraternal protection, bearing in mind that you and your family’s welfare and future are our paramount concern.
VIVAT JESUS!

GUILLERMO N. HERNANDEZ
President

Father of Knights of Columbus in the Philippines

 

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