Manila Rep. Jaime C. Lopez (2nd district), committee chairman, said the SEC’s admission during hearings on a controversial pre-need company to effectively oversee the industry, prompted the committee to amend House Bill (HB) 294, which seeks to establish the Philippine Pre-Need Insurance Corp. (PPIC), to delegate the regulatory power to the IC.
SEC Chairman Fe B. Barin backed the amendment.
“The SEC doesn’t take a position on whether it should continue to regulate pre-need companies because as a matter of fact, the mandate of the SEC is more as a central corporate registry under the Corporation Code and the regulation of securities under the Securities Regulation Code, acts which it principally implements,” she told lawmakers at Tuesday’s committee hearing.
Eduardo T. Malinis, IC commissioner, also supported the proposal.
Under HB 294, authored by Mr. Lopez, the proposed insurer would cover the in-force plans of all pre-need companies. It has set a pre-need insurance coverage of P100,000 per plan holder.
The bill also provides for a bailout package for distressed pre-need companies, and is allowed to issue bonds, debentures and other obligations as may be necessary to settle insured pre-need plans of closed companies. The amount still has to be set by the committee.
The PPIC shall have a pre-need insurance fund that would consist of the following: P2 billion initial appropriation from the government; collections from assessments, which shall not exceed one-tenth of 1%; reserves for insurance and financial assistance losses; and retained earnings.
The PPIC shall invest in obligations at any one time aggregating in excess of P1 billion without the approval of the IC, provided it would not sell or buy obligations for its own account and in its own right and interest.
Mr. Lopez said the proposed legislation will only cover active pre-need companies.
The committee has yet to decided whether the companies under rehabilitation would be included in the bill’s coverage. — Jhoanna Frances S. Valdez, BusinessWorld