Registration of Pre-need Contracts/Plans.
SEC. 14. Registration of Pre-need Contracts/Plans. — Within a period of forty-five (45) days after the grant of a license to do business as a pre-need company, and for every pre-need plan which the pre-need company intends to offer for sale to the public, the pre-need company shall file with the Commission a registration statement for the sale of pre-need plans pursuant to this Code. The Commission shall promulgate rules governing the registration of pre-need plans and the required documents which include, among others, the viability study with certification, under oath, of a pre-need brochure, a copy of the pre-need plan, and information and documents necessary to ensure the protection of planholders and the general public. Said rules shall further set forth the conditions under which such registration may be denied revoked, suspended or withdrawn, and the remedies of pre-need companies in such instances.
Registration Requirements.
SEC. 15. Registration Requirements. — The Commission shall set forth the requirements for registration of pre-need plans and shall require the following documents, among others:
Duly accomplished Registration Statements;
Board resolution authorizing the registration of applicant’s pre-need plans;
Opinion of independent counsel on the legality of the issue;
Audited financial statements;
Viability study with certification, under oath, of pre-need actuary accredited by the Commission;
Copy of the proposed pre-need plan; and
Sample of sales materials.
Such registration statements and sales materials required under this section shall contain the appropriate risk factors as may be determined by the Commission.
Accreditation of Actuary.
SEC. 16. Accreditation of Actuary. — The Commission shall have the power to set standards for the accreditation of actuaries directly responsible for the preparation and certification of the viability study of the pre-need plan submitted by the pre-need company for registration or amendment with the Commission. It shall further have the power to define the obligations and liabilities of actuaries accredited by it. No actuary engaged by a pre-need company shall at the same time be a stockholder or serve as a director of the board, chief executive officer or chief financial officer of the company or any such position that the Commission may determine to have an inherent conflict of interest to the position of an actuary.
Approval of Contract Forms.
SEC. 17. Approval of Contract Forms. — All forms, including amendments thereto, relating to the pre-need plans shall be approved by the Commission. No pre-need contracts or certificates shall be issued or delivered within the Philippines unless in the form previously approved by the Commission.
Pre-need Advertising Rules.
SEC. 18. Pre-need Advertising Rules. — Pre-need plans shall be advertised and sold in an appropriate non-misleading manner in accordance with the rules to be prescribed by the Commission.
It shall be unlawful for any pre-need company to advertise itself or its pre-need plans unless the Commission has approved such advertising material. The Commission shall have a period of ten (10) working days to approve or deny the advertising material and failure to act within the said period shall cause the advertising material to be approved. For purposes hereof, the Commission shall have the power to define the scope of its advertising rules to appropriately cover advertising or other communications to the public.
Any person who sells or offers to sell any pre-need plan or contract by any means or instruments of communication in violation of this section shall be liable to the person purchasing such pre-need contract who may sue to recover the consideration paid for such pre-need contract with interest thereon. In addition hereto, the Commission shall have the power to pursue the erring pre-need company in an administrative or criminal proceeding.
A fine of One hundred thousand pesos (P100,000,000.00) shall be imposed on any pre-need company found to have violated this section: Provided, That a second violation of this section shall, in addition to the fine imposed, result in the suspension of the license of the pre-need company.
Disclosures to Prospective Planholders.
SEC. 19. Disclosures to Prospective Planholders. — No registered pre-need plan shall be sold to prospective planholders unless an information brochure, which has been filed with the Commission, has been provided to the purchaser. The information brochure shall contain an explanation of the principal features of the pre-need plan, a statement that the planholder may avail of a default or reinstatement period within which to reinstate his lapsed plan, and the conditions of the same and the rates of return for scheduled benefit plans and illustrative yields for contingent benefit plans; and such other information that the Commission shall require by rule.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
