SALES of preneed plans were up in the first four months as clients bought more life products during the period, the Securities and Exchange Commission (SEC) said.
Data from the regulator showed that the number of preneed plans sold at end-April climbed by 7 percent to 76,635 year on year as life plans surged by 26 percent to 62,883.
Education plans suffered a 39-percent slump to 2,094, followed by pension plans, which contracted by almost 36 percent to 11,678.
In April alone, the industry’s plan sold decreased by 23 percent to 13,756 on the back of lower sales from life and pension plans that registered a drop of 18 percent and 46 percent, respectively.
Month on month, only education products improved as it surged by 118 percent while pension and life dropped 16 percent and 7 percent, respectively.
In terms of total value, preneed sales at end-April fell by 23 percent to almost P4 billion from a year ago with education plans registering sales of P227 million, 61- percent lower than the previous year. Pension plans dropped by 52 percent to P1.3 billion, but life products jumped by 32 percent to P2.4 billion.
The preneed industry is besieged by controversy after several companies ceased to sell products while the sector’s trust funds are in danger of not being able to cover the outstanding obligations to the planholders.
SEC earlier said it plans to raise the deposit contribution of pre-need firms to their trust fund to prevent the industry from collapsing.
The regulator is studying the feasibility and sustainability of increasing the trsut fund contribution from the first installment of premium paid on a plan.
At end-June, the local pre-need industry has about P46.83 billion in trust fund deficiency due to shrinking earnings from investments.
This plan came after Sen. Manuel Roxas suggested the increase in the deposit contribution to the trust fund from the present 5 percent scheme to 70 percent.
SEC documents showed that eight pre-need firms offering education plans have an average 25.17- percent contribution to trust funds in the first year and an average of 58.87 percent in the first five years.
These firms include Cocoplans, Danvil Plans, Eternal Plans, Grayline Plans, Loyola Plans Consolidated, Philam Plans, Sun Life Financial Plans, and Trusteeship Plans.
For pension plans, the average trust fund contributions of 16 firms amount to 21.77 percent for the first year and 59.18 percent for the first five years.
Firms with contributions higher than the minimum amount required are Ayala Plans, Caritas Financial Plans, CityPlans, Cocoplans, Danvil Plans, First Country Plan, First Union Plans, Grayline Plans, Loyola Plans, Mercantile Careplans, Permanent Plans, Philam Plans, Provident Plans, Sun Life, Transnational Plans and Trusteeship Plans.
Only six firms offering life plans have contributions above the minimum required, averaging 14.9 percent in the first year and 51.8 percent in the first five years.
These firms are Cocoplans, Eternal Plans, Loyola Plans, Paz Memorial Services, Saint Peter Life Plan, and Trusteeship Plans.
The SEC did not provide a list of the firms that complied with only the minimum requirement nor did it indicate if any firms have failed to make the minimum required contribution to the trust fund from the premium paid for plans.–Chino S. Leyco, Manila Times
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