Compiled from an official source version. Later amendments or repeals may not be reflected; the official text prevails.・Read the official text ↗
Prerequisites to Incorporation.
SEC. 7. Prerequisites to Incorporation. — Except upon favorable recommendation of the Commission, the Securities and Exchange Commission (SEC) shall not accept or approve the articles of incorporation and bylaws of any pre-need company. A foreign corporation may be allowed to engage in a pre-need business in the Philippines: Provided, That it shall comply with the pertinent laws, rules and regulations.
Amendment of the Articles of Incorporation and Bylaws.
SEC. 8. Amendment of the Articles of Incorporation and Bylaws. — Amendments to the articles of incorporation and bylaws of a pre-need company, including merger, consolidation and dissolution, shall not be approved by the SEC without the favorable recommendation from the Commission.
Paid-up Capital.
SEC. 9. Paid-up Capital. — A pre-need company incorporated after the effectivity of this Code shall have a minimum paid-up capital of One hundred million pesos (P100,000,000.00). Existing pre-need companies shall comply with the following minimum unimpaired paid-up capital: One Hundred million pesos (P100,000,000.00) for companies selling at least three(3) types of plan; Seventy-five million pesos (P75,000,000.00) for companies selling two (2) types of plan; and Fifty million pesos (P50,000,000.00) for companies selling a single type of plan. Existing pre-need companies with traditional education plans shall have a minimum unimpaired paid-up capital of One hundred million pesos (P100,000,000.00) The Commission may adopt risk-based principles on capital adequacy based on internationally accepted standards. In the exercise of its authority under this paragraph, the Commission may prescribe a higher minimum unimpaired paid-up capital for pre-need companies.
Licensing of Pre-need Companies.
SEC. 10. Licensing of Pre-need Companies. — No person shall operate as a pre-need company or engage in the business of a pre-need company unless licensed by the Commission in accordance with this Code. The license under this section shall expire one (1) year from the time of the registration. It may be renewed upon compliance with the prescribed requirements of the Commission. Such renewal shall be deemed approved if not acted upon within thirty (30) days from the time of filing of the application for renewal.
Qualification and Disqualification of Directors and Officers.
SEC. 11. Qualification and Disqualification of Directors and Officers. — To maintain the quality of management of pre-need companies and afford better protection to planholders and beneficiaries, the Commission shall prescribe, pass upon and review the qualifications and disqualifications of individuals elected or appointed directors or officers of pre-need companies, including its actuaries, and disqualify those found unfit. The Commission may disqualify, suspend or remove any director or officer who commits or omits an act which renders him unfit for the position. In determining whether an individual is fit and proper to hold the position of a director or officer of a pre-need company, regard shall be given to his integrity, experience, education, training and competence. The following persons, and those determined by the Commission to be unfit, shall in no case be allowed to serve or act in the capacity of an officer, employee, director, consultant or sales counselor of any pre-need company: Any person convicted of any crime involving any pre-need plan, security or financial product; Any person convicted of an offense involving moral turpitude or involving fraud or embezzlement, theft, estafa or other fraudulent acts or transactions; Any person who, by reason of any misconduct, is enjoined by order, judgment or decree by any court, quasi-judicial body or administrative agency of competent jurisdiction from acting as a director, officer, employee, consultant, agent or occupying any fiduciary position; Any person found by the Commission to have willfully violated or willfully aided, abetted, counseled, commanded, induced or procured the violation of this Code, the Insurance Code, the Securities Regulation Code or any related laws and any rules or orders thereunder; Any person judicially declared to be insolvent or incapacitated to contract; and Any person found guilty by a foreign court, regulatory authority or government agency of the acts or violations similar to any of the acts or misconduct enumerated in the foregoing paragraphs: Provided, That conviction in the first instance shall be considered as sufficient ground for disqualification.
Independent Directors.
SEC. 12. Independent Directors. — Pre-need companies shall have at least two (2) independent directors or twenty percent (20%) of the members of the board, whichever is higher. For this purpose an "independent director" shall refer to a person other than an officer, employee or any person having a fiduciary relation to the pre-need company, its parent or subsidiaries, or any other individual having a relationship therewith, which may interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Investment Restrictions of Directors and Officers.
SEC. 13. Investment Restrictions of Directors and Officers. — No director or officer of any pre-need company shall, after his election or appointment as such, directly or indirectly, for himself or as the representatives or agent of others, have an investment in excess of Five million pesos (P5,000,000.00) in any corporation or business undertaking in which the pre-need company’s trust fund has an investment in or has a financial interest with. No relatives of directors or officers of the pre-need company within the fourth degree of consanguinity or affinity shall, directly or indirectly, have an investment of more than Five million pesos (P5,000,000.00) in any corporation or business undertaking in which the pre-need company’s trust fund has an investment in or has a financial interest with during the incumbency or term of the director or officer involved.
Provisions on this page are reproduced verbatim from official open data. See the attribution line.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).