"The government has been dragging its feet too long to the detriment of millions of Filipino consumers who have invested in pre-need plans for the future of their family," Roxas said.
Roxas admitted that the problem of trust fund deficiencies had long been recognized by both government policy makers and the industry. "But such concern has not gone beyond endless debates and position papers," he said.
"While bank depositors have the Philippine Deposit Insurance Corp. (PDIC) to go to in case their bank runs into trouble, pre-need plan holders have no such entity to run to," Roxas said, adding that "bank depositors are amply protected with the existence of PDIC, but to whom will the victimized plan holders go to in order to recover their hard-earned money?"
Citing data from the Securities and Exchange Commission (SEC), a total of 92,000 plan holders have pre-need contracts valued at P2.7 billion which will no longer be serviced by 13 pre-need companies that have ceased to operate.
Roxas disclosed that the number of victimized plan holders and the amounts involved are actually higher considering that only 46 of the 91 registered pre-need companies have secured licenses to sell pre-need plans this year.
Among the reasons for their closure were: Suspension of primary franchise; the company has been or is being liquidated; and the court has declared them insolvent or they simply ceased to operate.
SEC records also show that another 23 pre-need companies have temporarily ceased operations either due to their failure to secure the required dealer’s license from the SEC or after the SEC issued cease-and-desist, suspension or revocation orders against them.
Two pre-need companies had been dissolved voluntarily while nine had been absorbed by other pre-need companies.
Based on SEC data, the pre-need industry, which markets educational, pension and memorial plans mainly to middle income families, has sold almost six million plans cumulatively valued at P260 billion. – Marianne V. Go