Insurance Commission goes after memorial chapels
MANILA, Philippines – The lnsurance Commission (lC) is investigating memorial chapels and associations offering products similar to life or memorial plans without the required licenses to operate as pre-need firms.
The lC issued a cease-and-decist orders against two entities – Majar Senior Citizen Damayan and Cosmopolitan Memorial Chapel – illegally offering pre-need services to senior citizens.
"The lC 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," lnsurance Commissioner Emmanuel Dooc said on Monday, July 13.
"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," he added.
Dooc said the investigation is meant to protect consumers and legitimate pre-need companies.
Demand for memorial plans
IC's May 2015 data shows there's a significant demand for pre-need plans, especially memorial and life plans.
It remains an attractive investment despite the collapse of other pre-need companies in 2009, the IC said.
Out of at least 200 companies offering pre-need plans in the 1990s, only 16 are currently operating a license.
The limited number of licensed firms is a good indicator, Dooc said. Only firms that are financially stable are allowed to engage in the pre-need business.
Republic Act No. 9829 – the Pre-Need Code of the Philippines – defines pre-need plans as contracts, agreements, deeds, or plans for the benefit of the plan holders which provide for the performance of future services, payment of monetary considerations, or delivery of other benefits at the time of actual need or agreed maturity date.
The law passed in 2009 transferred supervision and regulation of pre-need companies from the Securities and Exchange Commission to the IC.
The law also provides that only companies registered with and licensed by the lC to sell or offer pre-need plans can offer the services.
To protect the investing public, licensed pre-need companies cannot advertise itself or its plans unless the advertising materials are previously approved by the lC. – Rappler.com
Mourning Woman image via ShutterStock