An administration lawmaker yesterday called for an inquiry into the financial condition of pre-need companies like Pacific Plans and College Assurance Plans (CAP).
"We intend to conduct financial forensics on distressed pre-need firms," said Sen. Manuel Mar Roxas, chairman of the Senate committee on trade and commerce.
Roxas was concerned by the failure of the Security and Exchange Commission (SEC) to monitor Pacific Plans, which sought protection from creditors last week.
The company has 34,000 plan holders.
"The SEC definitely has a lot of explaining to do. Pacific Plans was not in the SEC’s watch list of financially ailing pre-need providers," he said.
Roxas urged the SEC to re-examine the finances of pre-need firm to ensure "greater transparency."
Pre-need companies, he said, should also "come clean and truthfully declare their financial condition."
In February, Roxas’ committee and the committee on banks and financial institution chaired by Sen. Edgardo Angara started a joint inquiry into the financial woes of CAP, the country’s largest pre-need provider, with over a million plan holders.
Some P150 million worth of CAP checks had bounced because of a severe liquidity problem. The company has now opted to issue vouchers. But how the system works remains unclear.
In the Senate hearing in the first week of February, CAP promised plan holders it would secure a $150-million collateral-free loan from a large US investor "within 60 days."
But the self-imposed deadline has since lapsed without the company getting the supposed loan.