Unfair Claims Settlement Practices.
SEC. 25. Unfair Claims Settlement Practices. —
No pre-need company shall refuse, without just cause, to pay or settle claims arising under coverages provided by its plans nor shall any such company engage in unfair claim settlement practices. Any of the following acts by a pre-need company, if committed without just cause, shall constitute unfair claims settlement practices:
Knowingly misrepresenting to claimants pertinent facts or plan provisions relating to coverages at issue;
Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its plan;
Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under its plan;
Failing to provide prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear; or
Compelling planholders to institute suits or recover amounts due under its plan by offering, without justifiable reason, substantially less than the amounts ultimately recovered in suits brought by them.
Evidence as to the number and types of valid and justifiable complaints to the Commission against a pre-need company shall be deemed admissible in an administrative or judicial proceeding brought under this section.
Any violation of this section shall be considered sufficient cause for the suspension or revocation of the company's certificate of authority.
Payment of Plan Proceeds.
SEC. 26. Payment of Plan Proceeds. — In the case of scheduled benefit plans, the proceeds of the plan shall be paid immediately upon maturity of the contract, unless such proceeds are made payable in installments or as an annuity, in which case the installments or annuities shall be paid as they become due. Refusal or failure to pay the claim within fifteen (15) days from maturity or due date will entitle the beneficiary to collect interest on the proceeds of the plan for the duration of the delay at the rate twice the legal interest unless such failure or refusal to pay is based on the ground that the claim is fraudulent: Provided, That the planholder has duly complied with the documentary requirements of the pre-need company.
In the case of contingent benefit plans, the benefits shall be paid by the pre-need company thirty (30) days upon submission of all necessary documents.
Recovery of Investment.
SEC. 27. Recovery of Investment. — The planholder may institute the necessary legal action in court to recover his/her investment in the pre-need company in case of its insolvency or bankruptcy.
However, in case the insolvency or bankruptcy is a mere cover-up for fraud or illegality, the planholder may institute the legal action directly against the officers and/or controlling owners of the said pre-need company.
Consequences of Delay or Default.
SEC. 28. Consequences of Delay or Default. — In case of any litigation for the enforcement of any pre-need plan, it shall be the duty of the Commission to determine whether the payment of the claim of the planholder has been unreasonably denied or withheld. If found to have unreasonably denied or withheld the claim, the pre-need company shall be liable to pay damages, consisting of actual damages, attorney’s fees and legal interest, to be computed from the date the claim is made until it is fully satisfied: Provided, That the failure to pay any such claim within the time prescribed in Section 26 hereof shall be considered prima facie evidence of unreasonable delay in payment.
Distribution of Profits.
SEC. 29. Distribution of Profits. — A pre-need company may declare divided: Provided, That the following shall remain unimpaired, as certified under oath by the president and the treasurer with respect to items (a) and (b); and in the case of item (c), by the trust officer:
One hundred percent (100%) of the capital stock;
An amount sufficient to pay all net losses reported, or in the course of settlement, and all liabilities for expenses and taxes; and
Trust fund.
Any dividend declared under the preceding paragraph shall be reported to the Commission within thirty (30) days after such declaration.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
