The year in retrospect, saw the country successfully register a bright economic growth rate making its mark as the third fastest growing economy in Asia. The insurance industry however was on a different trend. In the first nine months of the year, the industry went on a slow down especially with life insurance companies in terms of total premiums. The slowdown however did not perturb your Association’s strong financial stability and remained resolute to its commitment to provide a secure future for us, brother knights and our families.
2014 was also declared the “Year of the Laity” by the Catholic Bishops’ Conference of the Philippines (CBCP), which called for the sanctification and transformation of the faithful by empowering the laity. In response, the Knights of Columbus Fraternal Association of the Philippines, Inc. (KCFAPI) embraced the theme “One In Transcending Challenges as Protectors of God’s Gifts” to incorporate the call of the Church through the social services our Association provides to its valued stakeholders and to accentuate that our Association relentlessly strives for the betterment of our welfare and bring us closer to experiencing the fullness of Divine Grace. Hence, it is with all pride that I present to you the performance of our Association for 2014.
ON PROVIDING OPTIMUM FRATERNAL SERVICE
We are committed to fulfill the primordial purpose of the Order of the Knights of Columbus which is “To render pecuniary aid to our members, our families and our beneficiaries”, as embodied in the 2003 Charter Constitution Laws of the Knights of Columbus. Your Association was able to insure a total of 61,891brother knights and family members with regular plans and Council Mortuary Benefit Plan (CMBP). Total protection benefits provided amounted to P13.1 Billion, a 5.56% increase from P12.38 Billion in 2013 or P720 Million.
Total insurance contribution in 2014 breached the P600 Million mark reaching P624.93 Million, 5.04% higher than the previous year’s P594.96 Million. Thank you for your support. Without the contribution of our insured members this phenomenal growth rate would not be possible.
A total of 6,879 new lives were covered with regular plans. This resulted to a First Year Contribution (FYC) of P151.9 Million, higher than the 2014 target of P150 Million. Although we had 6,879 new insured members sad to say this is a far cry to the 20,000 new members the 3 jurisdictions make in a year.
The CMBP, which offers affordable rates that highlight the social dimension of the plan, posted P1.58 billion worth of coverage to a total of 740 councils nationwide protecting 39,891 KC members and family members. Again a far cry to roughly 2,500 councils with 368,000 members.
Renewal Year Contribution was the highest so far at P460.1 Million, higher than P422.24 Million generated in 2013 and posted an increase of P38 Million or 9%.
KCFAPI gave P96.1 Million worth of death benefits covering 1,318 lives last year, inclusive of CMBP and Fraternal Accidental Death Benefit (FADB). Our Association also provided maturity claims covering 2,287 lives, inclusive of endowments and return of contributions amounting to P165.5 Million, an increase of 16.23% or P23.1 Million from the previous year. Total Living and Death Benefits granted to Benefit Certificate Holders in 2014 amounted to P338.85 Million. Total cash loans availed by the BC Holders was P202.5 Million covering 4,210 BC Holders compared to P134.95 Million in 2013. In times of financial difficulties, you can borrow against your benefit certificate. It’s not advisable to terminate and get its cash equivalent. You would only lose your protection if you do so. The small interest you’ll pay in your loan is not commensurate to the security you’ll get.
Providing service to brother knights and our immediate families will not be possible without the hard work and dedication of our Association’s field representatives. As of December 2014, there are 1,047 active Fraternal Counselors (FCs) nationwide, 454 of whom are new recruits. Seven (7) Unit Managers (UMs) nationwide were also appointed to recruit more FCs. Should they try to call on you, please give them the one hour they’re asking. It could mean the financial security of your family. I don’t think there’s anyone who wouldn’t want to protect their family.
Thirty-two (32) outstanding Fraternal Counselors and eight (8) Area Managers were recognized during the 38th Fr. George J. Willmann, SJ – Annual Family Service Awards held in Panglao, Bohol last March 6, 2015. The qualification for the Annual Family Service Award last 2014 was more challenging as KCFAPI introduced a new scheme of qualification for the awardees. The Association likewise made sure that it always provides the best to all its valued salesforce in line with its corporate mission. Hence, reward system was also improved. Leading the group of awardees was Bro. Manuel L. Naldoza of the Central Luzon Conquerors (CLC) who emerged as the Area Manager (AM) of the Year Awardee. It was Bro. Naldoza’s 4th time to be recognized as the “AM of the Year”. Bro. Lauro V. Evangelista of the Central Luzon Believers 1 (CLB1) bagged the Fraternal Counselor of the Year citation. It was his 3rd time to be recognized as the “FC of the Year.” Next year, we would like to have more awardees so we’ll know our message of getting your families secured is getting across. We want more from the Visayas and Mindanao as we know, like in Luzon, our brothers in Visayas and Mindanao are responsible enough to care for their families.
BC HOLDER FOCUSED
Our Association has continuously positioned its services and programs to exceed Benefit Certificate Holders’ needs and expectations. In 2014, we successfully uploaded the “BC Holders’ Manual” on the KCFAPI website (www.kofc.org.ph) with the objective of providing not only to the Benefit Certificate Holders but to the general members as well a reference guide on the various BC related transactions and frequently asked questions.
Also, KCFAPI successfully implemented the PUSH notification system. This provides Benefit Certificate Holders, with e-mail address in our records, a system generated notification in the form of the latest soft-copy of the Status Information Sheet thru e-mail whenever there are updates on their Benefit Certificates. Thru this innovation, Benefit Certificate Holders can now view the status of their Benefit Certificates from the convenience of their own home.
Through the Fr. George J. Willmann, SJ Award for Academic Excellence, twenty four (24) graduates who are children of benefit certificate holders were recognized for their excellent academic performance. The award is being conferred to inspire the members of the Knights of Columbus Family to excel academically which could serve as an asset in forming a “Strong Catholic Society”. The program is divided into 4 divisions, namely: elementary and high school levels (valedictorians of the graduating class), college level (cum laudes and higher of the graduating class and must at least be a four year course) and passers of board/bar examinations.
In 2014, KCFAPI was confirmed to comply with the standards of ISO 9001:2008 by the certifying body, Certification International (CI). It was the 8th consecutive year that KCFAPI was awarded the ISO certification. As always, our Association endeavors to be at the forefront of continuous improvement through the Quality Management System, hence, it is preparing itself for transition to the new standards under ISO 9001:2015.
KCFAPI began in 1958 with a seed capital of P32,000 by 64 donors. Through the years it had grown into one of the most stable institutions in the industry with a total asset of P4.51 Billion. Its investment portfolio as of December 31, 2014 amounted to P4.29 Billion, an increase of 8.06% or P320 Million from P3.97 Billion as of December 2013.
Investment revenue was P233.4 Million as of year-end of 2014. Despite low interest rates KCFAPI posted an investment yield of 5.93% exclusive of unrealized loss on fair value on profit and loss investments.
Our Association was able to generate excess of revenue over expenses before estimated participation of Benefit Certificate Holders amounting to P32.8 Million as of December 31, 2014 despite higher underwriting deductions of P671.1 Million.
The minimum Risk Based Capital Ratio (RBC) for mutual benefit association is 125% while for commercial companies it is 150% to be considered as financially stable to be able to meet its financial obligations. Our Association’s RBC ratio is 176.67% in 2014 which is more than enough to meet the standards imposed on commercial insurance companies like Philam, Sun Life and Manulife, the three giants of the life insurance industry.
KCFAPI managed its operations satisfactorily as shown by its operating expense ratio to total contribution of 20.34% as of year-end 2014, only a slight increase from last year’s 20.03%. This is less than 21 centavos per 1 peso contribution, all the rest goes to our investment to protect and meet our obligations to you in any eventuality.
The external auditor was paid P431,631.20 for its engagement to audit the financial statements of KCFAPI for 2014. In addition, there were no non-audit engagements in 2014, hence, no non-audit fees paid.
There were no mergers, acquisitions and/or takeovers in 2014.
WHOLLY-OWNED OR MAJORITY OWNED COMPANIES AND FOUNDATIONS
We also have to invest our funds to other endeavors not only to increase our investment yield but to further strengthen our Association to be able to provide and meet the needs of our members.
On March 13, 2014, the Securities and Exchange Commission approved the incorporation of the Kompass Credit and Financing Corporation (KCFC). The corporation is the latest long term equity investment of the Association with a total capitalization of P300 Million. KCFC offers various financing products such as housing, car, business and salary loans not only to members of the Order but also to the general public. We’re counting on your support as its income would mean more benefits for us in the form of dividends on our benefit certificates.
One of the Association’s majority – owned companies, Keys Realty and Development Corp. (KRDC) with total resources of P437.6 Million, continues to expand its services to the public. During the year its Mortuary Division, Holy Trinity Memorial Chapels and Crematorium completed the construction of two (2) top of the line new chapels and refurbishment of two (2) chapels at its ground floor. These are fully operational, thereby, enhancing its competitiveness in the area. We have our own crematorium and we are an NBI accredited medico legal facility.
In August of the same year Keys Realty embarked on a project to construct a pension house with commercial units in General Santos City, South Cotabato worth more than P55.0 Million. At 30% occupancy, it stands to earn for Keys from P650 – P850 Thousand a month starting 2016. At 50% occupancy, it stands to earn from P925 – P1.1 Million a month. Its management does not plan to be satisfied with 50% occupancy.
As a result of its continuing expansion and service enhancements of its mortuary business, the company posted a net income of P11.7 Million which is higher than the P9.4 Million posted last year.
Mace Insurance Agency, Inc., is another majority- owned company of KCFAPI engaged in non-life insurance. It was established in May 1980 and has total assets of P9.77 Million as of December 2014. The main thrust of the company is to provide non-life coverage to K of C members, their families and the general public as a whole at the most affordable premium with better benefits than other non-life entities.
The Knights of Columbus Fr. George J. Willmann Charities, Inc. (KCFGJWCI) acts as one of the corporate social responsibility units of the KCFAPI. Aside from providing religious scholarships to poor and deserving diocesan priests as its primary focus, the Foundation is also seriously pursuing the promotion of the Cause of its Founder, Fr. George J. Willmann, SJ.
For its religious scholarships, the Foundation takes pride in mentioning that since its establishment, it has assisted in the vocations of a total of 208 priests and seminarians, foremost of whom include His Eminence Luis Antonio Cardinal Tagle, three Bishops and seven Monsignors.
In 2014, the Cause for Fr. George J. Willmann, SJ was aggressively pursued in order to increase awareness about Fr. Willmann. In coordination with the National Executive Committee for the Cause of Fr. Willmann (NEC), a Promotions Coordinator was formally appointed to directly handle the actual physical legwork during the last seven months of the year to reach out to different entities – various K of C Councils, squires, youth and student groups, parishes, organizations and media entities – all to help establish the Fama Sanctitatis of Fr. George J. Willmann, SJ. By December 2014, Fr. Willmann was introduced/talked about in a total of seventy-six events spanning 18 K of C events or gatherings, 36 parishes, 12 organizations, 6 schools, and 4 public assemblies. Our promotional efforts reached out to an estimated 30,000 individuals to become more aware about Fr. Willmann and his sanctity and good works, service and devotion to the K of C Brother Knights, the poor and the youth in particular and the Filipinos in general.
In addition to promoting the Cause, the Foundation continued other related activities including the traditional TV Mass that commemorated the 37th Death Anniversary of Fr. George J. Willmann, SJ, conducting tours for various interested groups at the Fr. George J. Willmann, SJ Museum in Intramuros and the release of publications such as the Fr. Willmann Gazette and the Fr. Willmann Series on the Sacraments. Ties with K of C Priests were also strengthened thru more frequent invitations for them to join various scheduled K of C, KCFAPI and Foundation activities.
The Hospitalization Assistance Plan (HAP) for KC Priests continued to be available providing a P50,000/year funding coverage for reimbursement of medical expenses of the KC Priests.
The KC Philippines Foundation, Inc. (KCPFI) serves as the other corporate social responsibility unit of our Association. Aside from its main tradition of providing Collegiate scholarships to qualified but poor high school graduates, the KCPFI reached out to assist calamity victims as it started its P720,000.00 K of C Bahaynihan (A Fr. Willmann Housing Project) during the month of December 2014. Under this project, KCPFI started the construction of six (6) brick houses which are being donated to selected calamity victims in Tacloban, Leyte whose houses were totally destroyed by Typhoon Yolanda in 2013. In addition, KCFAPI, in coordination with the Knights of Columbus Visayas Jurisdiction, awarded pump boats to fishermen in Guian, Eastern Samar in April 2014.
In coordination with the Knights of Columbus, Luzon Jurisdiction’s pro-life activities, employees of KCFAPI and their families faithfully joined the Annual Walk For Life to promote and uphold the sanctity of life. It started in 2009 on the closest Saturday to March 25, the Feast Day of the Annunciation also known as the International Day of the Unborn.
Last September 13, 2014, the Foundation also successfully conducted the First KCPFI Grand Alumni Homecoming where it gathered a wide mix of its alumni-scholars, some returning four decades after their KCFAPI Officers headed by Pres. Bro. Arsenio Isidro G. Yap and EVP Ma. Theresa G. Curia with Hon. Dorothy M. Calimag-Deputy Insurance Commissioner during the awarding of Certificate of Authority to KCFAPI.
graduation while others were more recent graduates. After the alumni toured the Fr. Willmann Museum, Foundation Board members talked to them about the K of C Order, KCFAPI, the Foundation and more importantly, about Fr. George J. Willmann, SJ whose pioneering efforts enabled them to complete their education. The alumni all agreed to actively plan activities to help the Cause of Fr. Willmann to be able to give back to the person who was significantly responsible for the overall improvement in their lives.
During 2014, two graduates successfully hurdled the CPA Board examinations, two others passed the Physician Licensure examinations while one recent graduate garnered fifth place in the Electronics Engineering Licensure examinations.
As of end-2014, following is the summary of the scholars, scholar-graduates of both Foundations:
Current Scholars (2014-15): 90
- Theology: 20
- Collegiate: 62
- Licentiate – Local: 5
- Licentiate – Rome: 3
Graduated Scholars: 634
- Ordained Priests (Theology): 132
- Ordained Deacons (Theology): 4
- Waiting for Ordination: 17
- Licentiate – Local: 27
- Licentiate – Rome: 28
- Collegiate Scholarship: 311
- Vocational Scholarship: 114
- High School: 1
GOOD CORPORATE GOVERNANCE
In preparation for the 2015 ASEAN Financial Integration and as one of the regional initiatives in promoting an integrated capital market, the Philippines officially launched its participation in the ASEAN Corporate Governance Scorecard (ACGS).
In compliance to new requirements set by the Insurance Commission and in the interest of transparency, KCFAPI closely coordinates with the Insurance Commission in preparing the ASEAN Corporate Governance Scorecard, in electronic form, to conform with the prescribed standards. The electronic scorecard attests to the integrity and competence of the members of the Board of Trustees in the discharge of their duties.
Fair and balanced decisions by the Board of Trustees are foremost in its considerations. To ensure this, the members seated in the Board are highly dedicated members of the Order with their professional expertise and experience needed in steering KCFAPI towards its corporate goals. In addition, all Board of Trustees attended the seminar on Corporate Governance. They also conducted a review of KCFAPI’s material controls and risk management systems and have found them adequate. To maintain the impartiality of the Board, two independent trustees, namely Bro. Juan Abraham O. Abando, CPA and Atty. Rogelio V. Garcia continue to serve their term as members of the Board.
All members of the Board of Trustees are Independent Trustees. The Knights of Columbus Fraternal Association of the Philippines, Inc. (KCFAPI) was formed by the contribution of its Founder Members who in turn became the owners of the Association. Under its Articles of Incorporation and By-Laws, the Founder Members of the KCFAPI, have the exclusive right to vote and elect Trustees from the Founder or Regular Members of the Association. The members of the Board of Trustees are Independent Trustees as they do not have any interest in the Association or business which could interfere in the exercise of their independent judgment.
In addition, all members of the Board of Trustees are fraternalists, hence, they do not receive any remuneration including the President/Chief Executive Officer. They only are reimbursed for expenses incurred in attending meetings.
The record of attendance of the Board of Trustees for the calendar year is as follows:
The Association’s Executive Vice President and Chief Operating Officer, Ma. Theresa G. Curia, is a Fellow, Institute of Corporate Directors, a non-stock, non-profit organization dedicated to the study and professionalization of Philippine Corporate Directorship.
In order to be of greater service to all Benefit Certificate Holders, KCFAPI continues to strengthen its sixty five (65) human resources with the necessary tools to transcend challenges and contribute to the Association’s overall objectives.
To strengthen the employees’ cognitive skills, KCFAPI provides continuous learning and development. Our Association engages the Life Office Management Association or LOMA, an employee training and development association based in US, widely known as the leading provider of learning solutions for life insurance companies in over 70 countries worldwide. It administers a series of designation programs. To date, there are seven (7) employees who have earned the FLMI designation, five (5) ALMI, five (5) PCS and seven (7) ACS. Apart from this, a Computer skills training on the basics of MS Excel was also provided to employees.
To ensure the employees’ health and physical well-being, KCFAPI sponsored a Wellness Talk on Nutrition and Healthy Lifestyle. There was also the Annual Family Day with Mini-Olympics held at the Marikina Sports Complex where employees got the chance to participate in different sports events such as the 100 meter dash, 200 meter dash, 50 meter giant sack relay, egg throwing/catching event, ball over under relay, obstacle course, tug-of-war, volleyball, 3-point shoot- out, badminton, table tennis, free throw, family henyo, kite making and flying.
The employee spiritual activities such as the retreat in Laguna facilitated by Couples for Christ speakers and mass presided by Msgr. Pedro Quitorio III, Pabasa and Stations of the Cross held during the Lenten Season and the Living Rosary during the holy month of October uplifted not only the spirituality of each employee but also enhanced the relationship amongst them. The other activities like the Birthday Celebrations, Annual Christmas Party and Family Day helped develop the employees’ social and interpersonal skills.
And in support to KCFAPI’s corporate social responsibility projects, employees were engaged in the following various activities during its weeklong anniversary celebration:
- Sept. 7: The Great Walled City Run in Intramuros, Manila was not only a fund raising activity for the Cause of Fr. George J. Willman, SJ but also a fun time for more than 1,000 attendees.
- Sept. 8: Marian Activity in relation to Mother Mary’s Birthday. The Association exhibited for one month different images of Mama Mary at the oratory of Fr. Michael J. McGivney. This was also the day the auction for a cause and fair started.
- Sept. 9: Fr. Willmann’s 37th Death Anniversary Mass/KCFAPI’s 56th Anniversary. The mass for Fr. Willmann was not only a commemoration of his death but also of his huge contribution to the Order of the Knights of Columbus.
- Sept. 10: Fraternal Benefits Group Day. On this day, qualified Fraternal Counselors attended a seminar on cash flow quadrant and were awarded the Founders’ treat promo and the 2nd quarter sales incentives.
- Sept. 11: Free Prostate Ultrasound. Using the Ultrasound of KC Luzon, there were more than 100 Brother Knights who were beneficiaries of this free prostate ultrasound.
- Sept. 12: Blood Letting. In coordination with the Philippine Red Cross, there were more than 20 people who freely donated their blood.
- Sept. 13: First KCPFI Alumni-Scholars Homecoming. A gathering of graduated scholars wherein the alumni agreed to actively give back by supporting the Cause for Fr. George J. Willmann, SJ.
- Sept. 14: Feeding Program/Family Mass. There were 56 children who were fed for breakfast before the Family Mass started.
IN SOLIDARITY WITH THE CATHOLIC CHURCH
KCFAPI was also blessed with the opportunity to play a role in the upcoming visit of the highest Prelate of the Roman Catholic Church, His Holiness Pope Francis. On November 24, 2014, the Fr. George J. Willmann Center was inaugurated as the National Media Headquarters in preparation for the visit of His Holiness in January 2015. Each week, KCFAPI would host regular media briefings given by a bishop or a representative of the CBCP on the updates towards the coming of the Pope. We have also donated a vehicle to the CBCP worth P827 Thousand for its use not only during the Pope’s visit but also for its regular official transportation.
KCFAPI has always been supportive of the spiritual endeavors of the Church, hence, through the P10 M Seed of Hope Fund it allotted in 2008, KCFAPI donated P1.0 Million to CBCP in 2014 from the seed money making a total of P5.1 Million donation from the Fund.
Our Association strongly supports the evangelical undertakings of the Church. In line with this, it regularly donates P25,000 monthly or P300,000 annually to “The Word Exposed,” a TV program of His Eminence Luis Antonio Cardinal Tagle. From January 2012 to December 2014, it has donated a total of P900,000 to the TV program.
KCFAPI supports the CBCP by maintaining a regular issue in the CBCP monitor and it regularly spends for the transportation of the clergy who attend the Annual Supreme Convention.
CARING FOR THE FUTURE
New and greater challenges lie ahead for KCFAPI in providing services to our brother knights and their families. Through the years, our Association had consistently shown its tenacity to overcome the challenges it faces and rise above its expectations. Driven by the belief to provide a secure and better life for you, our stakeholders, during difficult times, it is our prime concern to continually strive to give exceptional fraternal services to our brother knights and families. In return, your continuing patronage of the benefits and services offered by KCFAPI, as well as its wholly owned corporations, all the more inspire us to continuously go beyond our service standards. KCFAPI as it is today continues to be a leading mutual benefit association among its peers. Through the wisdom and guidance of the Board of Trustees, the dedication of the management, staff and field representatives, our Association has carried on in rendering unparalleled service to our Brother Knights and their immediate families.
It is but timely that 2015 was declared “Year of the Poor” by the Vatican as this underscores the role of KCFAPI as an instrument in alleviating the plight of our brother knights and their families in need. KCFAPI intends to intensify its activities towards the Year of the Poor in coordination with the programs of its two Foundations. In response to the Church’s call, our Association adopted the theme “KCFAPI Cares” on the belief that with our ground breaking benefits and fraternal services our Association can be a key instrument to the fulfillment of one’s yearn to experience the fruits of Divine Grace.
Lastly, I would like to remind you that the Knights of Columbus is a family-oriented organization tasked to protect and defend the sanctity of life, marriage and the family. We are supposed to address the needs of our clergies, our respective parishes and communities as an extension of our respective families. Our impact/effectiveness in our parishes and communities depends on how well we are able to provide and secure the financial future of our family. How can we address the needs of others if we ourselves cannot address the needs of our families? Love your wife, love your children. This is just a reminder, my worthy brothers in the Knights of Columbus. If you really, really care for your family, think of KCFAPI because KCFAPI cares.
ARSENIO ISIDRO G. YAP
President / Chief Executive Officer