By LORELEI CASTILLO
A NEOPHYTE party-list legislator moved to fast track the passage of a bill establishing the Philippine Pre-Need Insurance Corporation, which seeks to provide ample protection for pre-need plan holders.
Rep. Cinchona Cruz-Gonzales (Party list, CIBAC) said the deterioration of public confidence on the pre-need industry affected its sales due to the unexpected collapse of pre-need companies like Pacific Plans, College Assurance Plan (CAP) and others.
Recent data from the Securities Exchange Commission (SEC) showed that over the last 25 years, more than 92 firms have been actively engaged in the sale of pre-need plans, serving an estimated 3.8 million plan holders.
Cruz-Gonzales said it is imperative upon Congress to immediately approve House Bill No. 294 entitled “An Act Establishing the Pre-Need Code of the Philippines” because of the unexpected collapse of several pre-need firms in the country,
“It has definitely shaken the industry and caused grief and loss to countless parents, most of which are salaried employees and overseas Filipino workers (OFWs) who have lost all their savings invested in these pre-need firms,” Cruz-Gonzales said.
“CIBAC strongly adheres to its advocacy of protecting the interest and welfare of the Filipino people, especially when it is their hard-earned savings and investments which are at stake,” Cruz-Gonzales said.
Cruz-Gonzales said it is the primary responsibility of legislators to assure the investing public that it will not again lose the amount it invested for its family’s health and security and the education of their children and family members.
“The pre-need plan as a savings mechanism is designed to realize a Filipino parent’s deepest aspirations, education for their children, health care in times of illness, pension upon retirement and memorial service upon their death,” Cruz-Gonzales stressed.
House Bill 294, authored by Rep. Jaime C. Lopez (2nd District, Manila), Chairman of the Committee on Banks and Financial Intermediaries, and Rep. Juan Edgardo M. Angara (Lone District, Aurora) seeks to establish a benefit fund, which will guarantee payments in case a pre-need firm collapses.
Under the bill, the pre-need company shall deposit in the benefit fund a portion of the installment payment it collected under a pre-need plan contract.
The use of the funds shall be for the sole benefit of plan holders and shall be approved by the regulatory body, which is the Insurance Commission, based on the provisions of the proposed measure.
In 2007, total sales declined to P18.9 billion from P19.8 billion in 2006 and P20.5 billion in 2005. During the first ten months of 2008, industry sales dwindled to another 20.8 percent representing a decline to P12.7 billion from 2007’s figure of P16.05 billion.
In the same period, education plan sales alone plunged 51.8 percent amounting to more than P1billion in sales. Sales dropped to P1.59 billion in 2008 from P3.3 billion in the first ten months of 2007.