Palace to look into pre-need mess
Jan. 27, 2009
MALACAÑANG is stepping into the pre-need fray, saying it would come up with measures to help pre-need plan holders who stand to be affected should the pre-need industry collapse.
Socioeconomic Planning Secretary Ralph G. Recto, meanwhile, revived an old proposal to put pre-need firms under the supervision of the Insurance Commission (IC), which supposedly can do a better job of regulating the industry.
In a statement, Palace Deputy Spokesman Lorelei C. Fajardo yesterday said: “The Palace is deeply alarmed by the current predicament faced by the pre-need industry. The Palace is taking a pro-active stance and will seriously study and consider the assistance that can be extended to plan holders who stand to lose their hard-earned money.”
“We will determine who and what caused this problem. The Palace will convene its economic managers and will review the recommendations of the SEC (Securities and Exchange Commission) and ascertain whether any irregularity was committed,” she added.
Trade Secretary Peter B. Favila, however, was caught flat-footed by the statement, saying: “This is the first time I’ve heard about it. Let me talk to (Ms.) Fajardo first to check what she meant by her statement.”
Budget Secretary Rolando G. Andaya, Jr. and Finance Secretary Margarito B. Teves could not be reached yesterday.
Meanwhile, Mr. Recto, a member of the economic team, said “the IC is doing a better job compared with SEC so it only makes sense that IC be the regulator (of pre-need firms).”
He also suggested putting social security institutions Social Security System (SSS) and Government Service Insurance System (GSIS) under IC supervision. “It appears the SSS is doing a better job (in providing benefits to members) than GSIS. (Nevertheless), these pension institutions should be regulated by IC as well,” he said.
Pre-need companies are currently under the supervision and regulation of SEC. IC, on the other hand, regulates and supervises local insurance companies in accordance with the provisions of the Insurance Code.
The proposed Pre-need Code, which remains pending after several Congresses, suggests putting pre-need firms under IC supervision.
Pre-need firms warned of the industry’s collapse if the SEC did not relax its rules so they could replenish their trust funds and build up their capital. They incurred losses from investments as the financial crisis bit, they said, which would incapacitate them from servicing plan holders in the future if this is not addressed.
The SEC has given in to the pre-need firms’ request. Still, Federation of Pre-need Companies of the Philippines President Jose Miguel Vazquez said they would not refuse a government bailout if offered one, although they do not seek it.
Senate Majority Floor Leader Juan Miguel Zubiri has proposed allocating a tenth of the P10 billion economic stimulus package for livelihood programs to bail out pre-need plan holders.
Mr. Zubiri warned that hundreds of thousands of plan holders would be affected should the industry collapse.
Last week, three pre-need firms — Legacy Consolidated Plans, Inc., Scholarship Plan Phil., Inc., and All Asia Plans Corp., all members of the notorious Legacy Group — unilaterally ceased operations due to financial hardships. — Bernardette S. Sto. Domingo and Benjamin V. Buco, Jr.
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