In the Know: Preneed plans
Preneed plans are contracts that provide for future services or payment of money at the time of actual need. They are education, pension and memorial plans.
In December 2009, then President Gloria Macapagal-Arroyo signed into law Republic Act No. 9829, or the Pre-Need Code of the Philippines, which laid down the guidelines for operations of preneed companies and sanctions on violators.
The law also designated the Insurance Commission (IC) as the industry’s main regulator, in lieu of the Securities and Exchange Commission (SEC).
RA 9829 raised hopes about the recovery of the preneed industry, which had been plagued by the decline in sales of preneed firms due to loss of confidence in the wake of the College Assurance Plan’s collapse after the 1997 East Asian financial crisis.
Figures from the IC showed that for the third quarter of 2012, a total of 190,242 plans worth P6.35 billion were sold by preneed companies, broken down into 4,211 pension plans worth P558.4 million, 185,703 memorial plans worth P5.74 billion, and 328 education plans worth P53.2 million.
The IC listed 20 licensed preneed companies as of May 2012, compared with the 92 registered with the SEC when it assumed supervision of the industry in 1978.—Inquirer Research