P50-million pre-need protection fund eyed
Dec. 13, 2000
The Philippine Federation of Pre-need Plans Companies Inc. (PFPPCI) has asked the Securities and Exchange Commission (SEC) to approve the building up of P50 million fund for the proposed planholder’s protection fund as part of the program by the industry and the agency to check into the solvency of pre-need firms.
In the draft documents culled from the SEC, it was proposed that members of the federation contribute R1 million each to the fund. This will be advanced in their trust funds for the immediate building up of the proposed P50 million protection fund for planholders.
The P1 million contribution will be amortized by the preneed companies back to the trust fund for five years at R200,000 a year.
In this line, the PFPPCI said that the contribution to the fund will remain as assets of the company and that only the earnings of the fund will be used to pay for claims of planholders from insolvent companies.
Moreover, the federation recommended that limits of claims to be paid is P50,000 or the actual amount of the benefits being claimed whichever is lower. In addition, the fund, the federation said, should be managed by both the federation and the corporate regulator which is also subject to audit by the SEC auditors.
The move was among the salient issues that was discussed between the SEC and the federation, along with requiring pre-need firms to maintain a solvency margin and a minimum standard of valuation for all pre-need companies to determine their financial stability and solvency. (RGB)
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