A high-ranking SEC official said the commission welcomes the move taken by the pre-need firm to file a petition for corporate rehabilitation and its ongoing efforts to reach out to planholders and explain its predicament.
Under its rehabilitation plan, PET Plans seeks to convert all outstanding pre-need plans into a professionally managed mutual fund.
PET Plans will continue to operate but under a new name, PETPlans Financial Corp., which will set three business hubs — the network hub which will sell life, non-life, HMO and memorial park lots; OFW hub which will provide money transfer and document and parcel delivery services; and financial hub to provide loans and credit card facilities.
Owned by the Ocampo family, PET Plans intends to sell the life insurance and HMO products of the Philam Life Group.
PET Plans has assured planholders that it has enough liquidity to cover the next five years.
PET Plans president and chief executive officer Lorenzo Ocampo said the company has over P2.7 billion in trust funds, P1.2 billion of which is cash or near cash equivalents as compared to its estimate of only P700 million in availments for the next five years.
The pre-need firm also has P60 million worth of real estate properties that can be disposed of to raise more cash.
Ocampo assured planholders that its plan to convert all outstanding pre-need plans into a professionally managed mutual fund is the best alternative to get a reasonable value for their investments.
The management of the trust fund by a very large, experienced and reputable institution which can easily be accessed by planholders nationwide, will help reassure the planholders with peace of mind as their investments are intact and being taken care of, Ocampo said.
Ocampo said the pre-need firm is now in talks with several universal banks to manage the mutual fund.
He said PET Plans will continue to pay scheduled education, pension and memorial benefits to its plan holders even while the plan is awaiting approval by the court.
Ocampo said all subsequent installments or payments made by amortizing planholders will be deposited directly into the fund, for which additional certificates with the corresponding value will be issued to the planholders.
Once the conversion is completed, holders of fully paid fund certificates may decide to hold on to their investment so that it may continue to grow or may withdraw from their investment.
PETPlans, founded in 1988, has enjoyed a good reputation arising from good service to its planholders to whom it has paid P1.1 billion in benefits over the years.