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)

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