Pre-need code OKd; Roxas raises objection

The Senate has ratified the final version of the Pre-Need Code which seeks to protect plan holders and ensure the viability of an industry that has been weakened by a recent spate of bankruptcies and failures.

The long-overdue legislation received the Senate’s approval despite the objection of Senator Mar Roxas who felt that it has insufficient safeguards against malpractices of pre-need firms similar to those committed by the now-closed Legacy Group.

Roxas, chairman of the committee on trade and industry, batted for the revision of the bicameral version of the Code to include a provision that would ban officers or directors of bankrupt or closed pre-need companies from engaging in the same business or working for another pre-need outfit.

The Code increases the minimum paid-up capital of pre-need firms to P100 million to provide a solid capital base and lessen the risk of instability in the future. It requires full disclosure of how they have invested the trust fund of plan holders in keeping with the transparency rule.

All pre-need companies are placed under the primary and exclusive supervision and regulation of the Insurance Commission.

The Insurance Commission may prescribe a higher  minimum paid-up capital for industry players. The commission is empowered to enlist the aid and support of and/or deputize any and all enforcement agencies of government in the exercise of its functions.

“The pre-need sector is a vital part of the national economy and an anchor of hope for millions of Filipinos. But it needs to become stronger and more stable and realize its full growth potential. We need a regulatory framework that will provide  an environment that will allow pre-need firms to thrive and guarantee full protection for the investing public,” Roxas said.

The provision Roxas wants inserted is worded as follows: “Any officer, director, shareholder, principal, of any pre-need firm that is presently in bankruptcy is hereby prohibited from engaging in the business.” –Fel V. Maragay, Manila Standard Today