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Insurance Commission tightens monitoring of pre-need firms

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Lady Vicencio, ABS-CBN News

MANILA - The Insurance Commission is reorganizing its system of monitoring pre-need companies to ensure clients are able to receive claims. IC Commissioner Reynaldo Regalado promised to fast-track the process, particularly on claims related to pre-need companies under conservatorship, receivership, and liquidation status.“Dapat masigurong mapabilis at mapalinaw ang mga katayuan ng mga kumpanya. Importante dito ‘yong pag-aayos ng ating assigned conservators, receivers, at liquidators. Importante din na palakasin ang Insurance Commission division na tumitingin sa ganitong suliranin at naghahanap ng solusyon para mapadali at mapabilis nito,” Regalado said.Existing pre-need companies are now down to 12 servicing companies regulated by IC. During their heyday, the IC says there were more than 200 pre-need companies operating in the Philippines. Regalado says many pre-need companies had failed to provide for the educational, pension, and life plans availed of by their customers because of mismanagement. <ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/news/02/17/23/philhealth-disburses-p663-billion-for-covid-claims">PhilHealth disburses P66.3 billion for COVID-19 claims since 2020</a></li></ul>The IC monitored many cases wherein preneed companies were unable to utilize funds entrusted to them by their customers to earn enough returns to meet those obligations. They were especially hurt when inflation accelerated for obligations like tuition. One infamous failed pre-need company was the College Assurance Plan or CAP. As part of its plan to better regulate the sector, the IC started raising the capital requirements for pre-need firms. In 2022, a memorandum was released for the voluntary cessation of pre-need companies that failed to comply with those stricter requirements. Currently, there are two companies undergoing voluntary cessation, First Union Plans and Mercantile Care Plans. Some planholders of companies placed under conservatorship or receivership status are still in limbo, unsure if and when they might get what was promised in their pre-need contracts. <ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/blogs/business/01/31/23/your-health-insurance-can-come-to-your-rescue">When medical emergencies happen, your health insurance can come to your rescue</a></li></ul>Bob Umali, son of a planholder of Loyola Plans, has been waiting for progress on his father’s memorial claim since 2021. The planholder died of COVID-19 that year without receiving any payment. He had paid for his memorial plan over 5 years. “Cremated lahat so prior to the death, I applied for the cash surrender value of the plan. Alam naming hindi na magagamit ‘yon. Para na lang sana sa need na kakailanganin ng dad. Ang problema hindi ma-contact. Money ng dad ko ito eh. Kahit na maliit siya, pinaghirapan po ito ng daddy ko,” Umali said. Loyola Plans was put under conservatorship by the IC in July 2019 due to a trust fund deficiency of nearly P150 million. It was placed under receivership in March this year and is now preparing for liquidation, wherein the government will sell its assets to compensate its planholders.Regalado assured planholders that their claims will be prioritized once assets are liquidated.For Loyola Plans, IC assured that its real estate assets are enough to cover the claims of planholders. There are 18 items up for sale, including a lot valued at P235.9 million. A stay order on all payments of claims has been in place since March pending the liquidation of Loyola Plans’ assets.Meanwhile, other pre-need companies are thriving as demand remains steady.Caritas Financial Plans, one of the 12 operating pre-need companies, saw an increase in sales post-COVID-19 pandemic. Caritas Financial Plans President Ronnie Collado said that while a lot of their contracts lapsed due to non-payment of planholders during the pandemic, consumers also saw the need to save up for future needs.Collado says demand has been strong enough to keep the business afloat. Meanwhile, he credits the IC’s strict policies in handling their assets and trust funds for restoring the public’s faith in pre-need products.“’Yong educational plan noon nagkaroon ng problema that’s why people lost faith in pre-need. But ngayon magaling ang IC. They will not allow you to spend your trust fund na pang-invest sa iba because that’s what happened in the past. You cannot withdraw ‘yong money na ibinayad sayo ng customer unless they approve it. We have to submit quarterly or monthly financial statements so that they know the money is still there,” Collado said.<div>RELATED VIDEO</div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=2628103" width="100%"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div>

The Insurance Commission is reorganizing its system of monitoring pre-need companies to ensure clients are able to receive claims.

Insurance Commission tightens monitoring of pre-need firms

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Insurance Commission tightens monitoring of pre-need firms

Lady Vicencio,

ABS-CBN News

Published May 25, 2023 02:56 PM PHT

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Updated May 25, 2023 02:57 PM PHT

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Insurance Commission

pre-need plans

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educational plans

funeral plans

memorial plans

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