ROXAS VOWS TO FRONTLOAD CONSUMER RIGHTS IN PRE-NEED CODE

Senator Mar Roxas, author of the Pre-Need Code nearing passage in the Senate, said he intends to frontload consumer rights, make the industry viable once more and provide families with the necessary finances for their children's education.

He stressed the need for the adequate protection and security of consumers by way of a restructured trust fund mechanism; and for pre-need companies to be subject to strict disclosure requirements, including the disclosing of risks associated with buying pre-need plans.

He added: "We are designing a code for something that takes life savings away from ordinary people, and leads them to believe that these investments will be safe-kept, and that the amounts promised could be redeemed. This is why the farmer, the tricycle driver, the parent, should be informed as to what the risks involved are."

Roxas wants to restrict how planholders' money can be invested, preventing directors and officers of a pre-need company from having any investments in excess of P5 million in any corporation or business undertaking in which a trust fund is placed.

"We have learned from the past that a pre-need company can go bankrupt while its management holds on to billions worth stored in a sister company. Our laws have to adjust accordingly to eliminate such devious practices," he said.

"Even before, the SEC [Securities and Exchange Commission] already required a certain amount of planholders' money to be placed in a trust fund. However, these payments to the fund were too small and poorly timed, unable to meet financial obligations to planholders. They did not stop all these financial debacles from happening, where parents could not be paid, and promised funds could not be redeemed," he said.

"I thank the sponsor of the bill, Banks Committee Chairman Senator Ed Angara for taking up this important measure and for being open to changes for the best possible law," Roxas said.