Recto: Insurance Commission should regulate pre-need industry
abs-cbnNEWS.com | 01/27/2009 12:47 AM
Toss the pre-need industry to the Insurance Commission, Socioeconomic Planning Secretary Ralph Recto said, while hitting at how the Securities and Exchange Commission has handled the now troubled industry.
“The Insurance Commission is doing a better job. It is ahead of the curve,” he said.
Recto made the statement after more pre-need companies, including Legacy Consolidated Plans Inc., Scholarship Plan Philippines Inc., and All Asia Plans Corp. declared bankruptcy, leaving their plan holders at a loss on how to get their claims.
Recto, however, said the Insurance Commission is doing a better job as a regulator, and performs well in regulating insurance firms. “There should be a capital requirement for pre-need companies, as what the Insurance Commission does for insurance firms,” he said.
Currently, it is the SEC that regulates pre-need firms since their products–pre-need plans–are considered securities that are transferable and negotiable.
In the aftermath of the financial woes of College Assurance Plans, Pacific Plans, Platinum Plans, and other big-time pre-need firms that defaulted on their obligations sometime in 2004-2005, there has been a move to transfer the industry under the oversight of the Insurance Commission.
This transfer was raised during the investigation hearings at the Senate in 2005.
However, the industry association was against the transfer since Insurance Commission has tighter rules especially for insurance firm’s capital levels.
The transfer could have resulted in the pre-need firms being required to increase their capital base.
as of 01/27/2009 12:47 AM
No comments yet.