Press Release
January 27, 2009


As the number of aggrieved pre-need plan holders continues to swell with the gradual collapse of the pre-need industry, Senator Chiz Escudero has asked the Senate to look into, with dispatch, the manner by which the prevailing rules on the registration and sale of pre-need plans under the securities regulation code are implemented.

Escudero made such move by filing Senate Resolution No. 848 urging the Senate Committee on Banks, Financial Institutions and Currencies to check if the prescribed rules and regulations that regulate pre-need plans are properly implemented.

He said that as a declared policy, the State shall promote the development of the capital market, protect investors, minimize if not totally eliminate insider trading and other fraudulent or manipulative devices and practices which create distortions in the free market.

S.R. No. 848 specifically wants to determine if the establishment of trust funds by banks and investment houses duly licensed by the monetary board of the Bangkok Central, as part of the prescribed rules and regulations, are being implemented.

The senator, who incidentally is also the Chairman of the committee tasked by the resolution, said that the creation of such trust funds is statutorily regulated by the New Banking Law of 2000, Republic Act No. 8754. It mandates the Monetary Board of the Bangkok Central nag Filipinas to issue the necessary authorization for the operations of a trust business.

However, despite these regulatory provisions provided for by laws, three pre-need plan companies and nine rural banks closed in December 2008 due to insolvency.

"With these insurance companies failing to honor their commitments to their plan holders allegedly through bankruptcy or misreporting of their finances, we need immediately identify the problems and come out with legislative solutions".

Escudero said this will preserve and strengthen the integrity of banks and financial institutions as well as ensure and safeguard the protection and confidence of the investing public.

"These plan holders also supposedly hold the future and dreams of their children but these have been dissolved together with the collapse of these insurance companies".

"Where is the investor's interest right now? This must be addressed by addressing the problems responsible for the closure of certain rural banks and pre- need companies in the country" Escudero ended.

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