Pre-need Industry sees ‘brighter and better days’
With the passage of the Republic Act No. 9829 also known as the “Pre-need Code of the Philippines”, the Pre-need Industry leaders believe the brighter and better days has began.
Cocoplans President Caesar T. Michelena believes that the new law will bring in more sales to the pre-need firms since it signifies the importance of the pre-need sector and it will eliminate the public’s fears of instability.
The new Pre-need Code, signed by President Gloria Macapagal-Arroyo last December 4, 2009 gives stricter and implements changes in regulation of the pre-need sector. The industry as the code says would be transferred from the supervision and governance of the Securities and Exchange Committee (SEC) to the Insurance of Commission (IC) headed by Insurance Commissioner Santiago Javier Ranada. The new regulator shall have the power to prescribe qualifications of directors of the firms.
The Law seeks to provide protection for planholders as well as strengthen the pre-need industry. It imposes sanctions for violations of guidelines on the operation of pre-need firms. The law requires pre-need companies to comply with a minimum paid-up capital. New pre-need companies are required to have a minimum paid up capital of 100 million, while existing pre-need companies will have to comply with a minimum paid up capital of between P50 million to P100 million depending on the number of plan they sell.
The law likewise requires the creation of a trust fund for every pre-need category to ensure the delivery of benefits and services under a pre-need contract. Pre-need companies must also publish in two newspapers its yearly financial statements to ensure transparency.
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