Transfer of pre-need firms to IC opposed

The proposed transfer of the supervision of the country’s pre-need companies from the Securities and Exchange Commission (SEC) to the Insurance Commission (IC) was opposed by industry players and other sectors.

The position to keep the regulation of pre-need firms under the SEC was supported by the Philippine Federation of Pre-need plan companies, under the leadership of its president, Juan Miguel Vazquez.

"Simply put, why tamper with something that is running perfectly well," said Enrique A. Sobrepeña Jr., the former federation president, on the proposal floated by certain sectors.

"The SEC has shown it has the expertise and capability to regulate and supervise the industry," he added.

Sobrepeña points out that the industry has "grown immensely" under the supervision of the SEC, benefitting over five million plan holders, with over P20 billion in trust funds at present.

Sobrepeña, who is president of pre-need industry leader College Assurance Plan (CAP), stressed that any transfer of supervision will impact negatively on plan holders, and have the potential to affect their returns.

He explains that transferring supervision from the SEC to the IC will "affect the earning capacity" of funds. "In pre-need plans, profits that are earned from investments goes to a trust fund which benefits plan holders. In insurance, profits go to the corporation. Thus, any transfer would erode the earning capacity of funds, adversely affecting millions of plan holders," said Sobrepeña.

Pre-need trust funds, says Sobrepeña, are a hedge by middle and lower income families against inflation. "This gives them the chance to stretch their resources and provide for their future needs. Why take away from them the maximum benefits they can obtain under the present set-up," he said.

Banking industry leaders, along with consumer advocacy groups have already expressed opposition to the proposal to transfer supervision of pre-need firms to the IC.

"There is no logic in experimenting with a system that has woked so well for the past years and that has benefitted Filipinos by providing for their future needs such as education and retirement among others," ended Sobrepena.