Philippines Funeral Grim Trivia

Philippines Funeral Grim Trivia –

The following information covers some of the gloomy aspects of a funeral and can be disturbing.  The author agonized on whether to include these topics…which will tick-off those who profit, upset the OMG (oh my gosh) crowd and give the blog an off-color shade.   Since the blog is intended to develop smart and preparedness, leaving out these topics did not feel right.  Efforts, though, were taken to water-down these topics by leaving out details.

·      a) Witnessing an autopsy or instances of body preparation and reconstruction are a tough experience, certainly not for the faint-of-heart.  So tough that the author can not reconcile “rest in peace” with these procedures.  Instances when witnessing the procedure is necessary as when the person loved is young and attractive, common sense dictates vigilance.  No matter how high the integrity and the professionalism of the funeral home and its personnel and no matter how tough it is to witness these procedures, the author has observed that the depth of love for the departed is most evident at this stage of a funeral.   

    

·      b) When a viewing of the remains is to take place, a ‘pre-owned’ casket may be used without the knowledge of the bereaved.  The present popularity of cremations that follow a viewing have made ‘pre-owned’ caskets readily available.  An inspection of the casket prior to placement of the person loved will expose a ‘pre-owned’ one.  It goes without saying that if a ‘pre-owned’ casket is used, its cost should be less than a brand new one.

·      c) When a funeral home ‘manages’ to take possession of the remains without the knowledge and authorization of the bereaved, such as:

o              i)  when death results from tragic events and authorities                                      contact a ‘favored’ funeral home to attend to the victim;

o              ii) when death occurs in the absence of a relative; or

o              iii) when a funeral home has ‘favored arrangements’ with                                    a medical facility or its personnel;

the funeral home will likely proceed with unethical practices, abusing  the absence of the bereaved.  Add, a ‘pull-out’ fee will be imposed by the ‘favored’ funeral home before the deceased can be transferred to a preferred funeral home.  

·       d) The quality of body preparation and preservation will depend on the following:

·           i) the skill and professionalism of the morticians, 

·           ii) the array of facilities available to the morticians,

·           iii) the cause of death and the condition of the body, and

·           iv) the elapsed time from death to start of preparation.

·       

There are circumstances where even the experienced mortician having state-of-the-art training and access to the modern chemicals, equipment and facilities is unable to perform a proper preservation.  A ‘closed casket’ viewing results from such a situation. 

Proper body preservation process will allow viewing for several weeks.  When viewing has to be extended beyond the contracted period, additional charges to ‘extend body preservation’ is a questionable practice.

(July 23, 2014)

Post # 10

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Philippines Funeral and Pre-Need Trivia

Philippines Funeral and Pre-Need Trivia          

        

·   During the 1970s, a discord in the relationship between some funeral homes and a funeral pre-need company surfaced.   A bitter emotional conflict resulted.  The pre-need company began to set up or make arrangements to operate its own funeral homes in reaction to continuing servicing problems. In effect, the pre-need company directly competed with its former contractual servicing funeral homes.  In the provincial southern Philippines, proprietors who supported years of growth of the pre-need company felt betrayed.  Today, that pre-need and chapels company belongs to the handful of companies that have increased its popularity nationwide, testimony that their business model was and continues to be a success. 

·   The pre-need business model attracts the investor who values: a) an education for their children, b) a retirement fund for themselves, or c) funerals that will someday be necessary.  The investor plans, sets aside funds in affordable installments over a 5-year period, entrusting a pre-need company and its sales counselor.  Many pre-need companies had to stop operations over the past 50 years, leaving their investors with the same feelings as those scammed by PONZI operators.  

·   Cremations have increased in popularity for a number of reasons.  New technologies have reduced the crematory’s equipment investment. This option offered safety from loss of or damage to the interred loved ones in private, public cemeteries and memorial parks damaged  by floods, lahar, landslides which are presently more frequent following climate change.  
With today’s normal, local residents arranging a funeral should take into consideration these weather factors as some  facilities are repeatedly  affected, not to mention the damage to vehicles parked during viewing.  Add the benefit of improved annual maintenance and visiting convenience, as well as the modernity that a columbarium offers.

·  Cremations are considered environment friendly.  They are also more than financially practical.

(July 18, 2014)

Post # 9

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Philippines Funeral Trivia

Philippines Funeral Trivia

·      Funerals take a considerable emotional, mental and physical toll on members of the bereaved. The gathering of relatives and close attendees generate all sorts of energies.

·      In view of the short and unexpected time available to attend to the many and the varied tasks and decisions, the assignment of tasks and decisions among the bereaved may provide stress-relief and add to the bonding of a final farewell.
·      Funerals are instances when legitimate and illegitimate family members meet at different stages of a funeral.  There are instances when neither have had prior knowledge of the existence of each other.

·      Funeral costs often follow medical costs and other expenses, particularly in the case of tragic circumstances.  Funeral expenses are relatively large and unexpected.  Funds, when immediately available,  will reduce the stress a funeral may cause.

·      Viewing/wakes are public gatherings ... social events.  Sadly, the events are opportunities for free loaders of meals, snacks, refreshments and even put unattended valuables at risk.

(July 16, 2014)

Post # 8

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Philippines Pre-Need Trivia

Philippines Pre-Need Trivia

As early-on mentioned that the blog has already been written-up, it is being released piece-meal, in POSTS. Aside from lessening what is a tedious read, provision to accommodate response was anticipated.

The author recently has been cautioned against proceeding with the disclosure of his experiences, understandings and opinions.

In the event that the caution is perceived as more than verbal advice, a POST will appear on the blog detailing the author’s personal knowledge of names and dates in connection with:         

         1] a confidential Memorandum of Agreement dated June 11, 2013 signed between a JGV and an Attorney-in-Fact,

         2] a meeting on August 16, 2013,

        

         3] Rizal Commercial Banking Corporation check nos. 7829, 9229, 009285 and 009262 issued in favor of the author, and

         4] a detailed recollection of how the pre-need industry evolved.

(July 13, 2014)

Post #7

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Philippines Pre-Need Code - Implementing Rules & Regulations

Philippines Implementing Rules and Regulations - Republic Act 9829

·      A 21-page (small print) report covering 15 Rules signed by the Insurance Commissioner at the end of March 2010

·      Rule 1   General Provisions

·      Rule 2   Authority of the Commission   (Requires the Securities and Exchange Commission [SEC] to seek recommendations of the IC as a condition to approving any and all corporate matters of pre-need corporations.)

·      Rule 3   Organization, Licensing and Management of Pre-Need Companies   (Requires the SEC to seek recommendations of the IC before allowing changes in corporate Articles of Incorporation, By-Laws, ownership, directors and management.)

·      Rule 4   Registration of Plans

·      Rule 5   Licensing of Sales Counselors and General Agents  (Requires the IC to license all sales counselors and agents.)

·      Rule 6   Default and Termination by Plan Holders

·      Rule 7   Claims Settlement

·      Rule 8   Trust Fund   (The Trust Fund shall at all times be sufficient to cover the required pre-need reserve. This rule attempts to define the Trust Fund in 4 pages. The author, however, feels a need for clarity in the trust fund determination, particularly in the wording of Sec. 35. Just as financial statements are audited by an independent and accredited auditor SO MUST OUTSTANDING PRE-NEED CONTRACTS BE COVERED BY AN AUDIT REPORT.)

·      Rule 9   Actuaries for Pre-Need Companies   (The author questions the relevance of an actuarial report in the pre-need business.)

·      Rule 10   Reports and Examination

·      Rule 11   Financial Accounting Standards   (The Pre-Need Code created the ACTUARIAL RESERVE LIABILIES account to include in the pre-need company’s financial statements Trust Fund liability. The author believes this account must be in connection to an audit report of outstanding plan contracts.)

·      Rule 12   Suspension or Revocation of Authority   (The author assumes that because of: a) the long period without a Pre-Need Code, b) the existence of financially weak pre-need companies, and c) the existence of a large number of pre-need plan holders of financially weak companies ….this section of the Pre-Need Code provides leniency to enable the IC sufficient time to stabilize the industry. The leniency is in the form of permitting pre-need sales to continue despite non-renewal of the company’s Authority to Sell.)

·      Rule 13   Conservatorship and Proceedings upon Insolvency   (Cease and Desist Orders (CDO) are issued by the IC after proper notice and hearings citing specific issues for compliance. This is the prelude to serious action versus the pre-need company.)

·      Rule 14   Administrative Sanctions and Criminal Penalties

·      Rule 14   Miscellaneous Provisions

(Aug 4, 2014 …8:50am 1sr Quarter moon)

Post #6

More to follow ….

Philippines Pre-Need Code ...RA 9829

Republic Act 9829      An act establishing the Phiippines Pre-Need Code

·      A 15-chapter, 17-page report on a law placing all pre-need companies under the primary, exclusive supervision and regulation of the Insurance Commission [IC] as of Dec 3, 2009.

·      Chapter I   General Provisions

·      Chapter II   Authority of the Commission (Requires the Securities and Exchange Commission [SEC] to seek recommendations of the IC as a condition to approving any and all corporate matters of pre-need corporations.)

·      Chapter III   Organization, Licensing and Management of Pre-Need Companies (Requires the SEC to seek recommendations of the IC before allowing changes in corporate Articles of Incorporation, By-Laws, ownership, directors and management.)

·      Chapter IV   Registration of Pre-Need Plans

·      Chapter V   Licensing of Sales Counselors and General Agent (Requires the IC to license all sales counselors and agents.

·      Chapter VI   Default and Termination by Plan holders

·      Chapter VII   Claims Settlement (Specifies Claims Settlement.)

·      Chapter VIII   Trust Fund (The Trust Fund shall at all times be sufficient to cover the required pre-need reserve. Attempts to define the Trust Fund in 4 pages. The author, however, feels a need is called for clarity in the trust fund determination particularly in the wording of Sec. 35. Just as financial statements are audited by an independent and accredited auditor SO MUST OUTSTANDING PRE-NEED CONTRACTS BE COVERED BY AN AUDIT REPORT.)

·      Chapter IX   Actuaries for Pre-Need Companies (The author questions the relevance of an actuarial report in the pre-need business.)

·      Chapter X   Reports and Examination

·      Chapter XI   Financial Accounting Standards (The Pre-Need Code created the ACTUARIAL RESERVE LIABILIES account to include in the financial statements a Trust Fund liability. The author believes this account must be in connection to an audit report of outstanding plan contracts.)

·      Chapter XII   Suspension or Revocation of Authority (The author assumes that because of: a) long a period without a Pre-Need Code, b) the existence of financially weak pre-need companies, and c) the existence of a large number of pre-need plan holders of financially weak companies ….this section of the Pre-Need Code provides leniency to enable the IC sufficient time to stabilize the industry. The leniency is in the form of permitting pre-need sales to continue despite non-renewal of the company’s Authority to Sell.)    

·      Chapter XIII   Conservatorship and Proceedings upon Insolvency (Cease and Desist Orders (CDO) are issued by the IC after proper notice and hearings citing specific issues for compliance. This is the prelude to serious action versus the pre-need company.)

·      Chapter XIV   Administrative Sanctions and Criminal Penalties

·      Chapter XV   Miscellaneous Provisions

(July 27, 2014 ...6:40am ..full moon)

Post #5

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Philippines At-Need and Pre-Need Funerals

Some of the differences between Philippines

'at-need' and 'pre-need' funeral arrangements

   'At-need' arrangements are handled by thebereaved soonest AFTER death while 'pre-need' arrangements are made by anyone wishing to prepare and pay in advance PRIOR to one's own or or some other person's death.

·      The pre-need concept was originally based on:' a) ‘preparing and paying now for a later delivery’ business model, and b) on the pre-need company’s coursing to a funeral home a better share of its market. Later, pre-need plans were also used to interfere in the ‘at-need’ business. Pre-need plans purchased in bulk when prices are low, are warehoused until the later opportunity arises, then offered to a bereaved prior to the finalization of an ‘at-need’ contract. The sudden appearance of a pre-need plan may be linked to parties with knowledge of an impending or recent death; to parties who are set-up for financial gain from a funeral. 

·    
      Pre-need is fiduciary in nature where: 

a) monies are entrusted to a party (the pre-need company), 

b) a trustee (reputable banks) is contracted to maintain such funds in a trust fund, and 

c) sound arrangements exist between service providers and the pre-need company in connection with the future delivery of a service. Pre-need plans may also be purchased in ‘value’ form where a sum of money is later delivered instead of a service. In either case, whether a pre-need service plan or value plan, the funds paid in advance are held in trust by professional trustees and not a pre-need company. In theory, the service plan offers better value as the plan holder is saved from future increases in the cost of a service. The value plan under certain circumstances may be more advantageous on account of insurance features, should these features apply, and more than the face value of the value of the plan is collected.

       The pre-need concept once popular in the United States involved: 

1) a mortuary, 

2) a bank operating in the mortuary’s extended neighborhood, and 

3) a resident in the respective neighborhood. A joint bank account is opened by the resident and the mortuary where payments by the resident are deposited in the account. The payments are held in trust, earning interest, for the sole purpose of paying for a funeral service package earlier selected, decided and agreed upon by the resident and the mortuary.

·      
       In the United States today, a handful of large companies control both ‘at-need’ and ‘pre-need’ funeral arrangements and the character of 'pre-need' has changed.

·      A pre-need plan is different from an insurance policy. The pre-need plan, though, may incorporate insurance benefits but these are based on contractual arrangements with an insurance company.

·      
       The face value of a pre-need plans must be fully paid before any benefit can be delivered, provided the plan has not lapsed and is valid and outstanding.  However, an insurance policy is premised on actuarial considerations that determines premium payments which total to only fraction of the insurance policy’s face value.

·    
       Since a portion of the face value of a pre-need plan is used to defray the promotional, selling commissions and administrative expenses of the pre=need company, less than the face value is paid to the funeral home.

·      The ‘weak links in the pre-need chain’ of the past seem to be a lack of understanding of what is necessary to determine what ‘future delivery’ depends on.

 a) Outstanding plans sold should be covered by annual audit reports.  When a portion of the plans sold are ‘set-aside’ and not reflected in reports to the then SEC, this practice effectively hides these plans which are actually trust fund liabilities.

b) The pre-need company’s capacity to deliver on its service obligations should be assessed. Most pre-need companies relied on 12-month contracts with service providers, contracts not necessarily renewed by either party. Few pre-need companies had adequate ties with its service providers, nationwide.

c) The past practice of allowed the actuaries (engaged by the pre-need company) to use abnormally high interest rates to project trust fund growth. This caused an unrealistic positive effect on the financial viability of the pre-need company.

·      Republic Act 9829 or the Pre-Need Code and the Code’s Implementing Rules and Regulations are a tremendous boost towards the plan holder’s protection and strengthening the industry. However, the author believes there is room for improvement.

·      
       Considering how large the still unresolved financial scandal in the pre-need industry, much enforcement of the law is necessary, particularly in the case of the financially weak companies.

·      
       Since the 1960s when pre-need businesses appeared, more than 40 companies were formed to operate nationwide. Today, less than a hand full may be considered healthy. While the Insurance Commission (IC) is focused on strengthening the industry, a worrisome number of weak companies remain so that the IC has its “hands full” in asserting that such companies are and remain ‘above the waterline’. Presently, the Congressional Committee on Banking and Financial Institutions is taking the IC to task in behalf of the plan holders who claim to having been cheated.

·      The blog-author does not profess to be an authority on the subjects covered herein nor must he seen to be speaking for the SEC or the IC. It is only his experience, his understanding and his opinions on which he stands by are the basis for the blog’s contents.

·    
       Based on the author’s personal experience, the SEC and the IC have proven to be reliable in remedying deficiencies brought to their attention and/or uncovered by their own periodic visits and their annual reportorial requirements.  The fact though that these agencies are now faced with regulating many pre-need companies that operated without a Pre-Need law allowing for new technologies, business models and questionable practices 'to slip through the cracks', it will take time before all pre-need plan holder will be secured.  The prospects of the unhappy plan holders attaining justice would seem dim.

 (July 19, 2014 …10 am with the moon’s 1^st Qtr)

Post #4

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