10 pre-need companies on SEC watchlist

[johnart]

10 pre-need companies on SEC watchlist
By Zinnia B. Dela Peña
The Philippine Star 07/04/2005

The Securities and Exchange Commission (SEC) is closely monitoring 10 other pre-need companies that offered open-ended educational plans in light of reports that some of them are experiencing liquidity problems.

Apart from Pacific Plans Inc. and College Assurance Plans, other pre-need firms on the SEC’s watchlist are Platinum Plans, TPG Corp., Prudential Life Plans, PET Plans, Eternal Plans, Eduplan Phils., Legacy Consolidated Plans, Pryce Plans, Trusteeship Plans, and Scholarship Plan Phils.

These pre-need firms offered a total of 796,263 open-ended plans worth P30.037 billion. When combined, the actuarial reserve liabilities (ARL) of these companies amounted to P32.76 billion of which CAP accounted for P23.25 billion.

The ARL is the present value of all current and future tuition availments. It is based on inflation, interest rates, and expected tuition fee increases, among others.

A measure of how healthy a pre-need company is whether its trust fund is equal to or exceeds the ARL. The trust fund is the pool of premium payments from planholders that had been invested.

In open-ended plans, a pre-need firm pays the tuition of a beneficiary regardless of the amount. Before 1992, tuition increases were limited to no more than 15 percent each year.

When tuition fees were deregulated in 1992, most of the pre-need companies stopped selling the open-ended educational plans.

An SEC official said complaints have been piling against Platinum Plans for delayed or non-payment of obligations to planholders. Some investors have even questioned the luxurious cars and the frequent travels of the company’s top officials.

There were also reports that Platinum Plans has been remiss in paying its employees.

Following the collapse of Pacific Plans, the SEC has stepped up its monitoring over pre-need plan firms to ensure their compliance with existing regulations.

For one, the SEC will conduct on-site audits on pre-need companies to confirm the veracity of financial information submitted to the corporate watchdog agency as part of additional measures to safeguard the interest of the investing public.

Some lawmakers, however, are blaming the SEC for being remiss in its duty to monitor and supervise the industry, now plagued with controversies arising from the financial difficulties facing pre-need firms.

Nevertheless, the SEC said it remains committed to protecting the interest of investors.

Many fear that Pacific’s Plan filing of a petition for suspension of debt payments and rehabilitation could be a precedent to other pre-need firms encountering cashflow problems to evade their responsibilities to planholders.

The number of pre-need firms licensed by the SEC to sell securities to the public dropped to 33 from 42 last year.

Among the companies that are not licensed to sell pre-need plans are Platinum Plans Inc., Celestial Memorial Plans, East Asia Plans, FCM Plans Inc., Garden of Memories Memorial Plans, Gillamac Life & Pension Plans, Pension & Retirement Plans Corp., Samson Memorial Plans, and Special Plans.

[mazdamazda]

Heck... that is practically all of the major preneed companies around.

FYI, Prudentialife Plans was able to make an overpayment of P1B in their trust fund last year.

90% of their P12B trust fund is also liquid.

[totoybato]

any news about those pre need companies selling pension plans? Hindi kasi ako kumuha ng educ plans for my kids, and tama ang naging decision ko, instead, i placed my kids college funds in Tbills, sa pension plan ako kinakabahan, although di naman ganun kalaki ang na invest ko dito.

[docpete]

I think Prudential has the biggest share of the insurance market.Anyway doon ang edu and pension plan k0.Kung me problema paki post naman,thanks.

[mazdamazda]

ang may problem lang naman ay yung mga open-ended educ plans... hindi lahat ng preneed products ay ganyan...

docpete, before ang top 3 ay Philam, Prudentialife & CAP. kaso nga nawala na ang CAP (temporarily lang naman siguro)... so Philam & Prudentialife na lang ang naglalaban. both financially sound naman (kahit competitor namin sila... hehehe).

[johnart]

from business world top 1,000 corporations year 2003 (wala pang 2004 report)

life insurance category


gross revenues net income
1. Philamlife P16,835,000,000 P3,007,000,000
2. Sunlife P12,371,000,000 P1,448,000,000
3. Insular Life P7,948,000,000 P605,000,000
4. Philippine Axa P3,302,000,000 P23,000,000
5. Prudentialife P3,126,000,000 P(-201,000,000)
6. Manulife P2,389,000,000 P 259,000,000
7. Ayala Life P1,863,000,000 P(-126,000,000)
8. Great Pacific Life P1,320,000,000 P(-27,000,000)
9. Prulife P1,083,000,000 P(-52,000,000)
10. CMG P1,072,000,000 P(-89,000,000)
11. Generali Pilipinas P779,000,000 P(-54,000,000)
12. Prumerica Life P727,000,000 P 26,000,000

[johnart]

from business world top 1,000 corporations year 2003 (wala pang 2004 report)

For Pre-need naman

Education

gross revenues net income

1. Philam Plans P4,235,000,000 P126,000,000
2. CAP P2,444,000,000 P(-4,537,000,000)
3. Loyola Plans P 781,000,000 P76,000,000


Pension
1. Pacific Plans P2,348,000,000 P(-71,000,000)
2. TPG Corp P894,000,000 P18,000,000
3. PET Plans P851,000,000 P(-142,000,000)

[mazdamazda]

from business world top 1,000 corporations year 2003 (wala pang 2004 report)

life insurance category

Life Insurance & Preneed are two different industries.

[docpete]

thanks Mazda2.Me life insurance naman ako sa Philam.Ewan ko kung bakit kuha ng kuha ng life insurance ang Mrs.Nakapangalan sa akin lahat!Me premonition siguro hehehe...

[mazdamazda]

FYI:

Prudentialife Posts 23.41% Market Share for January

Prudentialife Plans, Inc. posted the highest number of pre-need plans sold with 10,174 plans or a remarkable 23.41% consolidated market share for the month of January 2005.

In the latest report by the Securities and Exchange Commission (SEC), PLPI leads in selling pre-need products. For life, Prudentialife posted 60.33% market share with 8,544 plans sold; 8.92% market share for pension with 1,110 plans sold; and 10.23% market share for education with 520 plans sold.

For January to December 2004 SEC report. Prudentialife captured a consolidated market share of 20.05% with 77,766 plans sold. Prudentialife sold 21,868 life plans attaining 25.16% in the market share; 34,830 pension plans with 19.57% market share; and 21,068 education plans or equivalent of 19.12% market share.

Prudentialife President Jose Alberto T. Alba assured both planholders and employees that Prudentialife has the capability to service its obligations. "The company's trust fund is P12.5 billion as of March 31, 2005 and posted a Net Income of over P300 million last fiscal year. In fact, the latest actuarial valuation shows that Prudentialife has an excess of P1.0 billion in its trust fund," he said.