Insurance Commission warns on 2 unlicensed firms selling memorial plans
The Insurance Commission on Wednesday warned the public against two companies that have been selling memorial plans despite lacking the license for pre-need firms.
Insurance Commissioner Emmanuel F. Dooc identified the companies as Cosmopolitan Memorial Chapel, and Majar Senior Citizen Damayan.
“The Insurance Commission issued a cease and desist order against Majar Senior Citizen Damayan, preventing it from offering memorial service packages to its members without being licensed by the commission as a pre-need company,” Dooc disclosed in a statement.
Dooc said the association has been offering “a mutual-aid inspired program for senior citizens collecting a fixed amount of money purporting to be a membership fee in exchange for free memorial services.”
“Another cease and desist order was issued against Cosmopolitan Memorial Chapel, preventing it from advertising memorial services packages as it is not a licensed pre-need company,” Dooc added.
Dooc said the Insurance Commission was already investigating these firms.
“This investigation is aimed at ensuring that our agency is doing all it can to protect consumers from entities purporting to be pre-need companies, and [also protect] the legitimate companies engaged in pre-need business,” he explained.
The Insurance Commission said that the Pre-Need Code of the Philippines has defined pre-need plans as “contracts, agreements, deeds or plans for the benefit of the planholders which provide for the performance of future service/s, payment of monetary considerations or delivery of other benefits at the time of actual need or agreed maturity date, as specified therein, in exchange for cash or instalment amounts with or without interest or insurance coverage and includes life, pension, education, interment and other plans, instruments, contracts or deeds as may in the future be determined by the commission.”
“Under the law, only companies registered with and licensed by the Insurance Commission to sell or offer to sell pre-need plans can engage in the pre-need business. In order to protect the investing public, such licensed pre-need companies cannot advertise itself or its plans unless its advertising material is previously approved by the commission,” it pointed out.
As of May this year, 16 licensed companies were recorded to be offering pre-need products, from a high of over 200 firms during the 1990s, Insurance Commission data showed.
“Although there are only a few companies legally allowed to engage in the pre-need business, this is a good indicator that only those who are financially stable are allowed to engage in pre-need business. With the enactment of the Pre-Need Code and stringent regulatory requirements, the public is assured that the liabilities of the companies will be met,” Dooc noted.
The Insurance Commission claimed that “there is still a significant demand for pre-need plans, especially memorial/life plans, despite the collapse of other pre-need companies in 2009, due to the reform in the regulatory law governing the pre-need industry when the Pre-Need Code was enacted in 2009.”
The Pre-Need Code transferred the regulation and supervision of pre-need firms to the Insurance Commission from the Securities and Exchange Commission.
