New rules on pre-need plans

August 16, 2001
NEW RULES ON THE REGISTRATION AND SALE OF PRE-NEED PLANS UNDER

SECTION 16 OF THE SECURITIES REGULATION CODE
RULE 1
Definition of Terms
As used in these Rules:
1.1. "Commission" refers to the Securities and Exchange Commission.
1.2. "Pre-Need Plans" are contracts which provide for the performance
of future service/s or payment of future monetary consideration at
the time of actual need, payable either in cash or installment by
Planholders at prices stated in the Contract with or without interest or
insurance coverage and includes life, pension, education, interment,
and other plans which the Commission may from time to time
approve. DCATHS
1.3. "Pre-Need Company" or "issuer" means any corporation registered

with the Commission and authorized/licensed to sell or offer for sale
Pre-Need Plans. A Pre-Need Company may be a single plan (selling
one type of Pre-Need Plan) or multi-plan (selling more than one (1)
type of Pre-Need Plan).
1.4. "Planholder" means any person, natural or juridical, who purchases
Pre-Need Plans for whom or for whose bene ciaries future services
and/or payments are to be rendered or made at the time of need or
for whom or for whose bene ciaries payment/bene ts are to be
delivered as stipulated and guaranteed by the Pre-Need Company at
the time of need or maturity of the Contract. The term includes the
assignee, transferee, and any successor in interest of such
Planholder.
1.5. "Contract Price" is the stipulated price paid by the Planholder for the
purchase of a Pre-Need Plan. Contract Price may be paid either in
lump sum (single payment) or in installments.
1.6. "Bene ts" are the money or services which the Pre-Need Company
undertakes to deliver in the future to the Planholder or his beneficiary.
1.7. "Insurance Premium Reserve" is the amount that must be set aside
by a Pre-Need Company to pay for premiums for insurance coverage,
if any, of fully paid Planholders.
1.8. "Salesman" means a natural person engaged in the sale, whether on
commission or salary basis, of Pre-Need Plans upon authority of a
registered Pre-Need Company and registered by the Commission to
engage in the business of selling Pre-Need Plans.
1.9. "Trust Fund" means a fund set up from Planholders' payments,
separate and distinct from the paid-up capital of a registered Pre-
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Need Company, established with a Trustee under a trust agreement
approved by the Commission, to pay for the Bene ts as provided in
the Pre-Need Plan.
1.10. "Liquidity Reserve Fund" means a portion of the Trust Fund set
aside by the Trustee to cover the Bene ts due to Planholders during
the ensuing year.
1.11. "Plan Value" is the value of the Bene ts which the Pre-Need
Company undertakes to deliver upon maturity.
1.12. "Fixed Value Plans" are Pre-Need Plans whose bene ts and costs
are fixed and pre-determined at the inception or purchase of the Plan.
1.13. "Actual cost or Traditional Plans " are Pre-Need Plans wherein the
bene ts or services at the time they are due are guaranteed,
regardless of any increase in cost from the originally assumed values
since the date of issue of the Pre-Need Plan.
1.14. "Actuarial Reserve Liability" (ARL) is the measure of liabilities of the
Pre-Need Company for its In-Force Plans or Lapsed Plans as of
valuation date.
1.15. "In Force Plan" means a Pre-Need Plan for which the Pre-Need
Company has an outstanding obligation, either for (1) delivery of
benefits or services or (2) payment of termination value.
1.16. "Delinquent Plan" is a Pre-Need Plan where any due installment has
been unpaid.
1.17. "Lapsed Plan" means a Delinquent Plan which has remained unpaid
beyond the grace period of two (2) months from date of delinquency.
1.18. "Reinstatement period" means the period within which a Lapsed
Plan may be reinstated which shall in no case extend beyond two (2)
years from the lapse of the grace period.
1.19. "Cancelled Plan" means a Lapsed Plan which has remained unpaid
for more than two (2) years counted from the lapse of the grace
period.
1.20. "Surrender" means the termination of a Pre-need Plan at the option
of the Planholder in exchange for its termination value at surrender
date.
1.21. "Termination Value" is the amount the Planholder should be paid
upon surrender of the Pre-Need Plan prior to maturity or availment of
full benefits.
1.22. "Federation" shall mean the Philippine Federation of Pre-Need Plan
Companies.
RULE 2
Minimum Paid-up Capital of Pre-Need Plan Company
Any new corporation applying for registration to act as an issuer of Pre-Need
Plans shall have a minimum paid-up capital of One Hundred Million Pesos
(P100,000,000.00); provided, that existing Pre-Need Companies with paid up capital of
less than One Hundred Million Pesos (P100,000,000.00) shall have until April 30, 2002
to comply with this requirement. For this purpose, the moratorium on registration of
new Pre-Need Companies shall be extended up to April 30, 2002. Provided however,
that the moratorium does not apply to companies that acquire the shares and/or the
assets and liabilities of existing Pre-Need Companies and who meet the P100.0 Million
paid-up requirement.
RULE 3
Registration of Pre-Need Plans
No corporation shall issue, offer for sale, or sell Pre-Need Plans unless such
plans shall have been registered under Rule 4.
RULE 4
Registration Procedure
4.1. All Pre-Need Plans shall be registered by the issuer or its authorized
representative by filing with the Commission six (6) copies of the following:
1. Duly accomplished Registration Statements
2. Board resolution authorizing the registration of applicant's securities
3. Opinion of independent counsel on the legality of the issue
4. Supporting documents:
a.) Latest Articles of Incorporation and By-Laws of the Issuer
b.) Trust agreement with the Trustee
c.) Copies of lea ets, brochures, press releases, handbills or other
printed/typewritten/mimeographed literatures which the issuer
intends to distribute to the public
d.) Copies of related contracts such as mortuary contracts,
school contracts or other service providers' contracts
e.) List of schools for traditional education plans, including
current costs of promised benefits
f.) Copies of agency contracts with general agents, agencies,
counselors, and salesmen
g.) Curriculum vitae of Officers and Directors
h.) Photographs of the signatories to the Registration Statement
taken not more than 30 days prior to the ling of registration
statements
i.) NBI clearance of the Directors and Principal O cers of the
issuer or current passport
j.) Training Program for agents, agencies, counselors, and
salesmen
k.) Application of dealer's license for initial registration
l.) Specimen of Plan contracts
m.) Plan application form
n.) Plan contract/agreement
o.) Specimen copies of Group Master Policy for Group Credit Life
and Group Yearly Renewable Term including copies of
insurance riders for supplementary insurance bene ts; sample
copies of individual insurance certificates
p.) Detailed Price schedule showing minimum and maximum
pricing for the Notice and Order
q.) The written consent of the expert to be named as such and
who has certi ed any part of the Registration Statement or any
documents included therein shall be secured and attached to
the Registration Statement
5. Audited nancial statements accompanied by a long form audit
report of the certifying auditors as of a date not more than ninety (90)
days prior to the date of ling of the Registration Statement, with the
balance sheet showing all the assets of the issuer, the nature and cost
thereof whenever determinable, with intangible items segregated,
including any loan to, or from any o cer, director, stockholder or
person directly or indirectly controlling or controlled by the issuer, or
person under direct or indirect common control with the issuer, and
all the liabilities and surplus of the issuer showing how and from what
sources such surplus was created.
If the above cannot be complied with, an unaudited nancial
statement as of a date not more than ninety (90) days prior to the
date of ling of the Registration Statement, certi ed under oath by the
principal o cer of the company, or person performing similar
functions, may be submitted. And in addition, the latest audited
financial statement accompanied by a long form audit report.
6. Latest interim nancial statements for the month preceding the ling
of the Registration Statement
7. Actuarial feasibility study with actuarial certi cation of SEC
accredited pre-need actuary containing the following:
i.) A viability model which includes, but is not limited to, the
following:
A) Interest rate assumptions;
B) Withdrawal assumptions: lapses and surrenders
C) Schedule of Trust Fund deposits and projections;
D) Amount and costs of plan bene ts including the
contingent bene t availment rates assumed for
mortuary-type benefits;
E) Expenses and loadings including, but not limited to, all
required fees and taxes, commissions, overrides,
bonuses, premiums on insured bene ts, and all other
charges;
F) Schedule of Termination Values;
G) Schedule of Projected Reserve Liability Values;
H) Pricing schedule including how the gross pre-need price
was generated with actuarial formulations.
ii.) A statement certifying that the actuarial formulations used in
the viability model are in accordance with generally accepted
actuarial principles and practices, existing laws, and pertinent
rules and regulations of the Commission;
iii.) A statement of opinion that the actuarial assumptions used in
the viability model are reasonable and appropriate for the plan;
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iv.) A statement certifying that the plan price/s, scheduled trust

fund contributions, projected reserve liabilities, and termination
values are in accordance with generally accepted actuarial
principles.
v.) A statement certifying that the actuary has reviewed the
provisions of the plan contract relative to its bene ts and
guarantees which have been quanti ed and considered in the
pricing, reserve valuation, trust fund contribution, and
termination values;
vi.) A statement of opinion that all insurance bene ts included in
the plan agreement are covered under insurance contract(s)
with a duly licensed insurance carrier.
vii.) Actuarial notes on the plan description, formulations and
assumptions used in the viability model for the complete
duration of the plan;
4.2. The Registration Statement shall be signed by the issuer's Chief
Executive O cer or Chief Operating O cer or Chief Finance O cer or a Corporate
Officer performing similar functions.
4.3. The Registration Statement shall be properly completed — all items shall
be answered; provided that items which are not applicable shall be lled with "n.a.". If
the issuer is selling two (2) or more types of Pre-Need Plans, the amount and number
for each type of plan to be registered shall be speci ed. Where applicable, all answers
shall be consistent with those stated in the actuarial study submitted under Rule 4.1,
paragraph 7 of this Rule.
4.4. Upon ling of the Registration Statement, the issuer shall pay the ling
fee as prescribed by the Commission, and the act of such ling shall be immediately
published by the Commission at the expense of the issuer, in two (2) newspapers of
general circulation in the Philippines, once a week for two (2) consecutive weeks,
reciting that a Registration Statement for the sale of such plans has been led, and that
the Registration Statement, as well as the papers attached thereto, are open for
inspection during business hours.
4.5. Processing of applications for registration of new plans shall be
completed within forty- ve (45) working days from receipt of complete application and
payment of fees.
4.6. If, at any time, the information contained in the Registration Statement is
or has become materially misleading, incorrect, inadequate or incomplete or the sale or
offering for sale of the Pre-Need Plans covered thereby tends to work a fraud or
prejudice to the investing public, the issuer shall immediately le an amendment to the
Registration Statement. Failure to do so shall cause the application of Rule 9.1.
RULE 5
Limitation on Information
Only the information or representations contained in the Registration Statement,
including exhibits thereto shall be considered as authorized by the issuer, and any
information or representation not included therein shall be regarded as proceeding
from an unauthorized source.
RULE 6
Certificate of Registration of Pre-Need Plans
6.1. A Certi cate of Registration of Pre-need Plans and a Permit to Offer for
Sale or Sell Pre-Need Plans issued by the Commission, shall be subject to the following
terms and conditions:
a.) The selling price of the Plans shall be at prices contained in the
Registration Statement and any subsequent increase or decrease in
price shall not be effected without the prior approval of the
Commission;
b.) No resale of Cancelled or Lapsed Plans is allowed;
c.) Only registered and licensed salesmen or general agent shall be
allowed by the issuer to sell, offer for sale or collect payments for
Pre-Need Plans;
d.) The issuer, before appointing a salesman or general agent, or
opening, closing, or transferring branches, shall secure the prior
approval of the Commission;
e.) No Plans shall be sold without prior registration from the
Commission;
f.) Trust Fund deposits shall be in accordance with the rates used in the
actuarial studies submitted under Rule 4.1, paragraph 7 (i.)
subparagraph C and shall be made within twenty (20) days from the
end of each reference month for payments received from Plans sold
either in cash or installment. The report of such deposits shall also be
submitted to the Commission within the same period;
g.) The Trust Fund, inclusive of earnings, shall be administered and
managed by a trust company, bank or investment house authorized to
perform trust functions in the Philippines. Investment of the Trust
Fund shall be in accordance with Rules 17 and 18 and other related
rules;
h.) No withdrawal shall be made from the Trust Fund except for paying
the Bene ts such as monetary consideration, cost of the service
rendered or properties delivered, bank charges and investment
expenses in the operation of the trust fund, termination values
payable to Planholders, annuities and taxes on trust funds,
contributions of cancelled plans to the Trust Fund, reasonable
withdrawals for minor repairs and costs of ordinary maintenance of
trust funds assets;
i.) The required minimum paid up capital shall be maintained unimpaired;
j.) The Audited Annual Financial Statements of the Pre-Need Company,
prepared in accordance with the Pre-Need Uniform Chart of Accounts
set forth in Rule 31, exclusive of the Notes to Financial Statements,
and the last quarter Trust Fund Statement shall be published within
one hundred twenty (120) days after the end of the scal year, as
required under Rule 23.1.2. A copy of such nancial statement as
published, together with the publisher's certi cate shall be submitted
to the Commission within ten (10) days after said publication;aCSTDc
k.) All advertisements need not be approved by the Commission but

shall contain the disclaimer provided in Rule 14.3;
l.) All reportorial requirements required under the Code, these Rules and
other relevant laws and/or rules shall be complied with;
m.) A sworn nancial report on the Trust Fund shall be submitted to the
Commission by the Trustee within ten (10) days from the end of the
previous month and by the Pre-Need Company within thirty (30) days
from the end of each quarter;
n.) Violation of any or all the conditions imposed in the Certi cate of
Registration or Permit to Sell shall subject the issuer and/or its
responsible o cials to the sanctions and penalties provided in
applicable laws and/or rules.
6.2. The Commission reserves the right to add, alter, change, amend or
otherwise modify any or all of the foregoing conditions or to impose any other
condition and to recall the Certi cate of Registration pursuant thereto, to effect therein
the necessary changes, alterations or modi cations if public interest or the protection
of the investors warrants such action.
RULE 7
Compliance Procedures
7.1. All Pre-Need Companies shall constitute a complaints action unit in their
respective o ces which shall have telephone hotlines to the Pre-Need Company listed
in the telephone directory to handle complaints and answer the concerns of
Planholders. A list of the telephone hotlines shall be furnished to the Commission.
7.2. All Pre-Need Companies shall designate a compliance o cer to act as
liaison o cer between the Pre-Need Company and the Commission who shall be
available to the Commission for referral of requirements for registration and other
compliance. The name of the designated compliance o cer shall be furnished to the
Commission, and shall be updated within seven (7) days of any change.
7.3. Pre-Need Companies selling life plans shall submit a list of their
accredited mortuaries, their telephone numbers and contact persons. Any change/s
therein shall be reported to the Commission within fifteen (15) days from such change.
7.4. Pre-Need Companies shall issue identi cation cards to all fully-paid
Planholders containing the basic information on the Pre-Need Plans bought to facilitate
delivery of services/payment of benefits. CSIcHA
RULE 8
Suspension of Permit to Sell of Pre-Need Plans
8.1. If, at any time the information contained in the Registration Statement
led is or has become materially misleading, incorrect, inadequate or incomplete or the
sale or offering for sale of the Pre-Need Plans covered thereby may work or tend to
work a fraud or prejudice the investing public, the Commission may require the issuer
such further information necessary or conduct an investigation to ascertain whether the
registration or Permit to Sell such Pre-Need Plan should be cancelled on any of the
grounds set forth in Rule 9.1.
8.2. The Commission may suspend the Permit to Sell such Pre-Need plan
pending further investigation, by entering an order specifying the grounds for such
action and by notifying by mail, personally, by telephone con rmed in writing, or by
telegraph, the issuer and every general agent who shall have notified the Commission of
an intention to sell such Pre-Need Plan.
8.3. Refusal to furnish information required by the Commission within the
time xed by the Commission, may be a proper ground for the entry of such Order of
suspension.
8.4. The Order, although binding on the person noti ed thereof, shall be
deemed con dential and shall not be published. Upon the entry of such order of
suspension, no further sales of such Pre-Need Plan shall be made until the Commission
orders otherwise.
8.5. In the event of the entry of an order of suspension, the Commission shall
give a prompt hearing to the parties involved. If upon such hearing, the Commission
shall determine that the Permit to Sell of any such Pre-Need Plan should be cancelled
on any ground speci ed herein, it shall enter a nal order cancelling the registration and
the Permit to Sell and prohibiting the sale of such Pre-Need Plan. If, however, upon such
hearing the Commission nds that the sale of the Plans will neither be fraudulent nor
result in fraud, it shall forthwith enter an order lifting the order of suspension, and the
Pre-Need Plan shall be restored to its status as a registered Pre-Need Plan contract
under the Code, as of the date of such order of suspension.
8.6. Travel bans may be recommended to be issued by the appropriate
authority on all the o cers and directors of the issuer, upon issuance of a Cease and
Desist Order or Order of suspension.
RULE 9
Involuntary Cancellation of Registration
9.1. The Commission may cancel the registration of any Pre-Need Plan and
the Permit to Sell such Pre-Need Plan by issuing an Order to this effect, setting forth its
ndings in respect thereto, if, after due notice and hearing, it shall appear that the
issuer:
a.) Is insolvent;
b.) Has violated any of the provisions of the Code, or the rules
promulgated pursuant thereto, or any order of the Commission of
which the issuer has notice;
c.) Has been or is engaged or is about to engage in fraudulent
transactions;
d.) Is in any other way dishonest or has made any fraudulent
representation in any circular or other literature that has been
distributed concerning the issuer or its Pre-Need Plans;
e.) Does not conduct its business in accordance with law.
9.2. The Commission may compel the production of all the books and
records of the issuer, may administer oaths to, and examine the o cers of such issuer
or any other person connected therewith as to its business or affairs, and may require a
balance sheet exhibiting the assets and liabilities of such issuer and/or its income or
profit statement, certified to by an independent certified public accountant.
9.3. If the issuer shall refuse to permit an examination to be made by the
Commission, its refusal shall give ground for the cancellation of registration.
9.4. Notice of issuance of an order of cancellation shall be given by mail,
personally, by telephone con rmed in writing, or by telegraph, to the issuer and every
dealer and broker who shall have noti ed the Commission of an intention to sell such
Pre-Need Plan.
9.5. The power of the Commission to cancel the registration and/or the
Permit to Sell is without prejudice to its power under the Securities Regulation Code to
enforce compliance therewith.
RULE 10
Voluntary Cancellation of Registration or Suspension of Permit to Sell
10.1. A registration of a Pre-Need Plan may be cancelled or a Permit to Sell
may be suspended or cancelled by the Commission upon Petition for its suspension
and/or cancellation, as the case may be, by the issuer as herein provided.
10.2. A Petition for the cancellation of registration of a Pre-Need Plan or a
Petition for suspension and/or cancellation of a Permit to Sell shall be accompanied by
the following:
a.) Petition for the cancellation of the registration or Petition for
Suspension and/or Cancellation for the Permit to Sell stating the
reasons therefor;
b.) Proof of the reasons for cancellation of registration or suspension
and/or cancellation of the Permit to Sell;
c.) Proof of publication of a Notice to
Stockholders/Investors/Planholders of said Petition for Cancellation
of Registration and/or Petition for Suspension and/or Cancellation of
a Permit to Sell;
d.) Board Resolution certi ed under oath by the Corporate Secretary of
the issuer and attested to by the President or one performing similar
functions approving such Petition For Cancellation and/or Suspension
as the case may be;
e.) List of all Planholders;
f.) A Certi cation under oath by the Treasurer of the issuer attested to
by the President that the Planholders' contributions were refunded
and their claims fully settled;
g.) A joint and several assumption of liability executed by the Treasurer
and the President of the issuer for claims that may arise as a result of
said cancellation/suspension; and
h.) Evidence of su ciency of the trust fund to cover payment of
outstanding liabilities to Planholders.
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10.3. After ling of the Petition and supporting documents and payment of
the ling fee, the Petition shall be immediately published by the issuer in two (2)
newspapers of general circulation, once a week for two (2) consecutive weeks reciting
the contents of the Petition and notifying Planholders to file their claims with the issuer.
10.4. If after the completion of the aforesaid publication, the Commission
nds that the petition together with all the other papers and documents attached
thereto is on its face complete and that no party stands to suffer damage thereby, it
shall issue an order cancelling said registration or cancelling and/or suspending the
Permit to Sell. However, such order shall not preclude any Planholder from his available
remedies under the law should the cancellation and/or suspension cause him damage.
RULE 11
Registration of Additional Plans
11.1. For applications for registration of additional plans which involve a
change in bene ts or other terms and conditions of existing plans contracts or a
change in actuarial assumptions, a new Registration Statement shall be led,
speci cally providing the requirements under Rule 4.1 pars. 1 to 4 (b-f, l-p), 5-7, Rules
4.2-4.4.
11.2. Processing of Applications for additional plans which involve a change
in bene ts or other terms and conditions of existing plan contract or a change in
actuarial assumptions shall be completed within thirty (30) working days from receipt
of complete application and payment of filing fee.
11.3. If there are no changes in the bene ts and other terms of the additional
Pre-Need Plans sought to be registered from that previously registered with the
Commission, then submission of the requirements under Rule 4.1 pars. 1-3, 4 (p), 5 and
6 shall su ce provided that the Pre-Need Company simultaneously submits a sworn
certi cation duly accomplished by a Commission accredited actuary, on the prescribed
form; and provided further, that, should economic developments emerge impacting on
the actuarial assumptions previously utilized, a new actuarial study shall be required;
and provided nally, that a sworn statement shall likewise be led, signed by the
persons required to sign the registration statement, to the effect that there has been no
change in the information/documents previously filed.
11.4. Processing of applications for additional plans which do not involve a
change in bene ts or terms and conditions of existing plan contracts or actuarial
assumptions shall be completed within twenty (20) working days from receipt of
complete application and payment of filing fee.
RULE 12
Amendments to the Pre-Need Plan Contract or Other Documents Pertinent to
Registration
12.1. No Pre-Need Plan contract, trust agreement, or other documents
pertinent to the registration of the plans shall be amended or modi ed without prior
approval of the Commission, and such amendment or modi cation shall neither affect
adversely the Planholders thereof nor impair any term or condition in the Pre-Need Plan
or other related documents.
12.2. Applications for price increase of Pre-Need Plans without any changes
in bene ts and actuarial assumptions shall not be subjected to actuarial review, and
may be led by submission of a duly notarized Commission prescribed actuarial
certi cation that there are no changes in plan bene ts and assumptions, provided, that
there are no trust fund de ciencies/violations; and provided further, that the order
rendering the Registration Statement effective was issued more than a year but not
exceeding three (3) years from the date of the approval of the original petition; and
provided, finally, that a revised price schedule is simultaneously submitted.
12.3. For purposes hereof, a petition for price increase without any change in
bene ts and assumptions refers to a plan whose promised bene ts have not been
changed, both in manner and timing of payment, and whose actuarial formulations have
not been revised in arriving at a new price increase causing the original assumptions of
trust and deposit rates, interest rates, expense rates, in ation rates, and availment and
decrement rates used in the original pricing to remain unchanged.
12.4. The price increase approved by the Commission shall only apply to Pre-
Need Plans sold after the approval sought under this Rule shall have been granted and
shall in no case apply to plans sold during the pendency of the application herein.
12.5. The processing of applications for price increase without any change in
bene ts or actuarial assumptions shall be completed within twenty (20) working days
from receipt of complete application and payment of filing fee.
12.6. Any other amendments which involve a change in bene ts or the
contract or actuarial assumptions shall require the issuer to le a new Registration
Statement, speci cally providing the requirements under Rule 4.1, pars. 1-4 (l-p), 5-7,
Rules 4.2-4.4.
12.7. The processing of applications for any other amendments which
involve a change in bene ts or the contract or actuarial assumptions shall be
completed within thirty (30) working days from receipt of complete application and
payment of filing fee.
12.8. The processing of applications for amendments other than those
mentioned above which do not involve a change in bene ts or terms of the contract or
actuarial assumptions shall be completed within twenty (20) working days from receipt
of complete application and payment of filing fee. DSacAE
RULE 13
Disclosure to Prospective Planholders
13.1. No Pre-Need Plans registered with the SEC shall be sold unless an
Information Brochure has been led pursuant to Rule 4.1, par. 4 (c) and approved by the
SEC together with the Registration Statement and is made available to the prospective
Planholder.
13.2. The Information Brochure shall contain the following information:
a.) Name, address, telephone number and identity of the person to
contact to answer any questions or address any complaint;
b.) The name and address of the trustee who will manage the Trust
Fund;
c.) Name, address, telephone number and identity of agent, if any;
d.) A statement that the salesmen of the Pre-Need Company or the
Agent has been authorized to sell Pre-Need Plans and licensed by the
SEC, indicating that the Planholder can check these data with the
office of the Pre-Need Company or the Agent;
e.) A statement that:
i.) The Pre-Need Company is required to contribute a certain
percentage of payments received to a Trust Fund to be
administered by a Trustee;
ii.) To monitor the performance of the Trust Fund and the
solvency of the Pre-Need Company, the Pre-Need Plan
Company is required to le nancial statements and audited
reports with the SEC which may be inspected by Planholders at
the Non-Traditional Securities and Instruments Dept.;
iii.) Any default in payment which continues for more than two (2)
years from date of lapse of the grace period of sixty (60) days
will result in the cancellation of the plan contract and the
forfeiture of any claims of the Planholder.
13.3. An Information Brochure shall not be used if the information contained
therein is outdated or does not accurately re ect the terms of the Plan or the nancial
ability of the Pre-Need Company through the use of Trust Fund Assets. In such cases
the Pre-Need Company shall submit an updated Information Brochure for approval of
the SEC.
13.4. The SEC may suspend the Permit to sell Pre-Need Plans when there is a
material change in the Information contained in the Information Brochure.
RULE 14
Advertisements or Publications Made by the Issuer
14.1. The Commission shall not process/approve any advertisement of a
Pre-Need Plan.
14.2. The approval of registration of Pre-Need Plans does not constitute a
recommendation or endorsement of the registered Pre-Need Plans, and this fact shall
be printed in bold face prominent type letters in all advertisements and/or literature
which the issuer, general agent, broker or salesman shall distribute to prospective
Planholders. IcAaEH
14.3. All advertisements are required to bear the following message in bold
face prominent type:
"THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THIS
ADVERTISEMENT OR DETERMINED IF THIS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY CONSTITUTES A VIOLATION OF THE
SECURITIES REGULATION CODE AND IS CRIMINALLY PUNISHABLE. THE PUBLIC
IS ENCOURAGED TO REPORT IMMEDIATELY TO THE SECURITIES AND
EXCHANGE COMMISSION ANY MISREPRESENTATION OR FALSE OR
INACCURATE STATEMENT."
14.4. Advertisement in broadcast medium shall likewise clearly emphasize

that the Commission has not approved or passed upon the accuracy and completeness
of such advertisement.
RULE 15
Registration of Dealers, General Agents and Salesmen of Pre-Need Plans
15.1. Any issuer selling its own Pre-Need Plans shall be deemed a dealer in
securities and shall be required to be registered as such and comply with all the
provisions hereof; provided that the issuer selling different types of Pre-Need Plans
shall be required to be registered as dealer only once for the different types of plans.
15.2. The issuer shall post a surety bond from a bonding company
acceptable to the Commission in the amount of Three Hundred Thousand Pesos
(P300,000.00) in favor of the Government of the Philippines and conditioned upon
faithful compliance with the provisions of the Code and these Rules. The Commission
may require an additional surety bond depending on the volume of sales of the issuer.
15.3. Processing of new applications for registration and license as Dealer
shall be completed within twenty (20) working days from receipt of complete
application and payment of fees, while applications for renewals shall be completed
within eight (8) working days from receipt of complete application and payment of
fees.
15.4. If the issuer contracts general agents or agencies to sell its pre-need
plans, such general agents/agencies shall be required to comply with paid-up capital
requirement for broker of securities and shall be duly registered as general agent/s or
brokers of Pre-Need Plans by the Commission. General agents or agencies shall post a
bond in the amount of One Hundred Thousand Pesos (P100,000.00).
15.5. Processing of new applications for registration and license as general
agent or broker of Pre-Need Plans as well as renewals thereof shall be completed
within eight (8) working days from receipt of complete application and payment of
fees.
15.6. No salesman shall be allowed to sell or offer to sell Pre-Need Plans
under this Rule, without being registered as such by the Commission. Registration shall
be issued upon approval of the registration application and payment of the prescribed
fee.
15.7. Registration shall not be approved unless the issuer or general agent
engaging the salesman's services certi es under oath that the salesman has been duly
trained pursuant to a training program approved by the Commission and has
successfully passed an examination given by the issuer or general agent and approved
by the Commission or the Federation and/or has sold at least P10,000.00 worth of
plans; provided, however, that Pre-Need Plans sold during the apprenticeship period
shall be co-signed by a duly registered salesman.
15.8. Registration shall cease upon the termination of engagement of the
services of such salesman with the issuer or general agent, provided that it may be
renewed for the ensuing year in accordance with this Rule.
15.9. Processing of applications for registration and license as a salesman
as well as renewals thereof shall be completed within eight (8) working days from
receipt of application and payment of fees.
15.10. Every registration under this Rule shall expire on the thirty- rst day of
December in each year, but a renewal for the succeeding year shall be issued upon
application and payment of the fee, and furnishing such information speci cally
required by the Commission. Application for renewals shall be made not less than thirty
(30) days nor more than sixty (60) days before the rst day of the ensuing year,
otherwise, they shall be treated as original applications.
15.11. The Commission shall charge a fee for every original application and
every renewal thereof.
15.12. Any Pre-Need Company selling its own plans who fails to le an
application for registration or renewal as a dealer in Pre-Need Plans or any general
agent who fails to apply for registration or renewal as a broker of Pre-Need Plans within
the period required by these rules or any salesman who sells plans without a valid
license shall pay the appropriate penalty therefor.
RULE 16
The Trust Fund
16.1. To guarantee the delivery of Bene ts such as monetary consideration,
cost of services rendered or property delivered, deposits shall be made by the issuer
into a Trust Fund to be established for each type of plan in accordance with the rates
used in the actuarial studies submitted under Rule 4.1, par. 7 (i) (C).
16.2. The minimum limits of the deposit contribution to the Trust Fund shall
be 45% of the amount collected for life plans and 51% of the total amount collected for
other plans unless a higher deposit contribution is determined by the actuary and duly
approved by the Commission.
16.3. In case of installment payments, the minimum limits, unless the actuary
and the Commission determines otherwise, of the deposit contributions to the Trust
Fund shall be in accordance with the following schedule:
Payment Received Life Plan Other Plan
Collection of the 1st 20% 5% 5%

of Contract Price
Collection of the 2nd 20% 10% 10%

of Contract Price
Collection of the 3rd 20% 70% 80%

of Contract Price
Collection of the 4th 20% 70% 80%

of Contract Price
Collection of the 5th 20% 70% 80%

of Contract Price
16.4. No withdrawal shall be made from the Trust Fund except for paying the
Bene ts such as monetary consideration, the cost of services rendered or property
delivered, trust fees, bank charges and investment expenses in the operation of the
Trust Fund, termination values payable to the Planholders, annuities, contributions of
cancelled plans to the fund and taxes on Trust Funds. Furthermore, only reasonable
withdrawals for minor repairs and costs of ordinary maintenance of trust fund assets
shall be allowed.
16.5. The Trust Fund shall have the following conditions:
a.) It must be established independently with the trust department of a
trust company, bank or investment house doing business in the
Philippines. The Trust Agreement shall be submitted to the
Commission for approval before execution and shall contain the
following salient provisions among others:
i.) The manner in which the Trust Fund is to be operated; ISADET
ii.) Investment powers of the trustee with respect to trust

deposits, including the character and kind of investment;
iii.) Auditing and settlement of accounts of the trustee with
respect to the fund;
iv.) Basis upon which the fund may be terminated;
v.) Provisions for withdrawal of the fund;
vi.) That the trustee shall submit to the power of the Commission
to examine and verify the trust fund;
vii.) An undertaking by the Trustee that it shall abide by the rules
and regulations of the Commission with respect to the Trust
Fund; and
viii.) An undertaking by the Trustee that it shall submit such other
data or information as may be prescribed by the Commission.
RULE 17
Investment of the Trust Fund
17.1. To ensure the liquidity of the Trust Fund to guarantee the delivery of the
Bene ts provided for under the plan contract and likewise obtain su cient capital
growth to meet the growing actuarial reserve liabilities, all investments of the Trust
Fund/s of a Pre-Need Company shall be limited to the following and subject to
limitations to wit:
1.) Fixed Income Instruments. These may be classi ed into short term
and long term instruments. The instrument is short term if the
maturity period is 365 days or less. This category includes:
a.) Government securities which shall not be less than 10% of the
trust fund equity.
b.) Savings/time deposits and common trust fund with a
commercial bank with satisfactory examination rating as of the
last examination by the Bangko Sentral ng Pilipinas.
c.) Commercial papers duly registered with the Commission with
a credit rating of "1" for short term and "Aaa" for long term
based on the rating scale of an accredited Philippine Rating
Agency or its equivalent at the time of investment.
The maximum exposure to long-term commercial papers shall
not exceed fteen per cent (15%) of the total Trust Fund equity
while the exposure to each commercial paper issuer shall not
exceed ten per cent (10%) of the allocated amount.
d.) Direct loans to corporations which are nancially stable,
pro table for the last three (3) years and have a good track
record of paying their previous loans from the Trust Fund of
Pre-Need Companies.
These loans shall be fully secured by a real estate mortgage up
to the extent of sixty per cent (60%) of the appraised value of
the property at the time the loan was granted.
The property shall be covered by a Transfer Certi cate of Title
registered in the name of the mortgagor and free from liens
and encumbrances.
The maximum amount to be allocated for direct loans shall not
exceed ve per cent (5%) of the total Trust Fund equity while
the amount to be granted to each corporate borrower shall not
exceed ten per cent (10%) of the amount allocated.
The maximum term of the loan should be two (2) years only.
2. Mutual Funds duly registered with the Commission, where such funds
are invested only in xed income instruments and blue chip securities
subject to the limitations prescribed by law, rules and regulations.
3. Equities. Investments in equities shall be limited to stocks listed on
the Main board of a local Stock Exchange.
These investments shall include stocks issued by companies that are
nancially stable, actively traded, possess good track record of
growth and have declared dividends for the past three years.
The amount to be allocated for this purpose shall not exceed twenty-
ve per cent (25%) of the total trust fund equity while the investment
in any particular issue shall not exceed ten per cent (10%) of the
allocated amount. The investment shall be recorded at the aggregate
of the lower of cost or market.
Existing investments which are not in accordance herewith shall be
disposed of by December 31, 2001.

4. Real Estate. These shall include real estate properties located in
strategic areas of cities and rst class municipalities. The Transfer
Certi cate of Title (TCT) shall be in the name of the seller, free from
liens and encumbrances and shall be transferred in the name of the
trustee in trust for the Planholders unless the seller/transferor is the
Pre-Need company wherein an annotation to the TCT relative to the
sale/transfer may be allowed.
It shall be recorded at acquisition cost.
However, the real estate shall be appraised every three (3) years by a
licensed real estate appraiser, accredited by the Philippine
Association of Real Estate Appraisers, to re ect the increase or
decrease in the value of the property. In case the appraisal would
result in an increase in the value, only sixty per cent (60%) of the
appraisal increase is allowed to be recorded in the books of the trust
fund but in case of decline in value, the entire decline shall be
recorded. Appraisal increment should not be used to cover up the
required monthly contribution to the trust fund.ATHCDa
The total recorded value of the real estate investment shall not
exceed twenty- ve per cent (25%) of the total trust fund equity of the
pre-need company. In the event that the existing real estate
investment exceeds the aforesaid limit, the same shall be leveled off
to the prescribed limit by June 30, 2002.
17.2. Investments of the Trust Fund which are not in accordance with the
preceding paragraphs shall not be allowed unless the prior written approval of the
Commission had been secured.
RULE 18
The Liquidity Reserve Fund
18.1. Notwithstanding the provisions of the immediately preceding Rule, no
less than ten per cent (10%) of the net value of Trust Fund Assets per type of plan shall
be set aside as a Liquidity Reserve to cover the Bene ts due to Planholders during the
ensuing year unless the Actuary determines otherwise. For this purpose, the Trustee
shall require the issuer to submit a list of fully paid plans payable during the year every
beginning of the company's fiscal year.
The following shall qualify as investments for the Liquidity Reserve Fund:
i.) Loans secured by a hold-out on, assignment or pledge of deposits
maintained either with the trustees or other banks, or of deposit
substitutes or the trustee itself or mortgage and chattel mortgage
bonds issued by the trustee;
ii.) Treasury notes or bills, Central Bank Certi cates of Indebtedness
which are short-term and other government securities or bonds, and
such other evidences of indebtedness or obligations, the servicing
and repayment of which are fully guaranteed by the Republic of the
Philippines;
iii.) Repurchase agreements with any of those mentioned above, as
underlying instruments thereof;

iv.) Savings or time deposits with government owned banks or
commercial banks; provided, that in no case shall any such savings or
time deposit account be accepted or allowed under a "Bearer",
"Numbered Account" or other similar arrangements;
v.) Investments in fixed income instruments.
RULE 19
Time of Making Deposits to the Trust Fund
19.1. Trust fund deposits due by virtue of collections shall be made within
twenty (20) days from the end of each reference month for payments received from
plans sold either in cash or installment. Failure to make the Trust Fund Deposit shall
subject the Pre-Need Company to payment of penalty.
19.2. Should the Commission discover a de ciency in the Trust Fund, it shall
give notice of the same to the Pre-Need Company, and require said Company to make
additional deposits to the Trust Fund. The Pre-Need Company shall have thirty (30)
days from receipt of notice to make the said deposits and correct the de ciency.
Failure to pay the de ciency in spite of notice by the Commission shall subject the Pre-
Need Company to payment of penalty.
RULE 20
Responsibilities of the Trustee
20.1. The Trustee shall exercise due diligence for the protection of the
Planholders guided by sound investment principles. It shall have the exclusive
management and control over the funds and the right at any time to sell, convert, invest,
change, transfer or otherwise change or dispose of the assets comprising the funds.
20.2. The Trustee shall not use the Trust Fund to invest in or extend any loan
or credit accommodation to the Pre-Need Company, its directors, o cers,
stockholders, and related interests as well as to persons or enterprises controlling,
owned or controlled by, or under common control with said company, its directors,
officers, stockholders and related interests.
RULE 21
Commission Power Regarding Trust Fund Assets
The Commission may, at its discretion, demand for the conversion to cash or
other near cash assets of the investments made by the Trustee to protect the interest
of the Planholders.
RULE 22
Encumbrance, Conveyance or Mortgage of Assets of Issuer
No encumbrance, conveyance or mortgage over all or substantially all of the
assets of the issuer shall be allowed without prior approval of the Commission.
RULE 23
Annual Reportorial Requirements
23.1. Annual Financial Statement
The issuer shall submit to the Commission ve (5) copies of its audited annual
nancial statements within one hundred ve (105) days after the end of its scal year.
To properly re ect the correct amount of liabilities as of the end of the scal year, the
Actuarial Reserve Liabilities presented in the audited nancial statements should be the
amount shown in the Actuarial Valuation Report duly certi ed by an accredited actuary.
The audited nancial statements shall be in the form of the Pre-Need Uniform Chart of
Accounts (PNUCA) and shall consist of the Balance Sheet, Income Statement and Cash
Flow Statement and shall be accompanied by:
i.) the Actuarial Valuation Report described in Rule 23.2.3;
ii.) the last quarter Trust Fund Statement and;
iii.) a list of fully paid plans (availing and not availing), active plans
and Lapsed Plans.
23.1.1. The said nancial statement shall be signed by the President and
Finance O cer of the Pre-Need Company certifying that said
statement has been audited by an independent auditor.
23.1.2. Said annual statement shall be published together with the trust
fund balance sheet, once a year within one hundred and twenty (120)
days from the end of the scal year in a newspaper of general
circulation in the city/province where the Pre-Need Company has its
head o ce. A copy of such statement as published, together with
the publisher's certi cate, shall be submitted to the Commission
within ten (10) days after said publication.
23.2. Actuarial Valuation Report
23.2.1 All actuaries employed/retained by Pre-Need Companies shall be
required to be accredited by the Commission upon proper
application. No actuary may be accredited unless he is a Fellow of
good standing of the Actuarial Society of the Philippines and his
application duly endorsed by it. Accreditation shall be renewed
annually. Processing of applications for SEC accreditation as well as
renewals thereof shall be completed within eight (8) working days
from receipt of complete application and payment of fees.
23.2.2. The Commission shall not process/take action on any and all
documents which require the opinion of an actuary unless he has
been duly accredited as such by the Commission.
23.2.3. An actuarial valuation report (hereafter, AVR) duly certi ed by a
Commission accredited actuary shall be submitted to the
Commission simultaneously with the reports required in Rule 23.1
and shall contain the following information for each type of plan:
23.2.4. Exhibit A — Actuarial Assumption and Methodology:
1.) Description of benefits and guarantees;
2.) Amount of plans registered and date of registration;
3.) Distribution of issued pre-need plan contracts showing
numbers and amounts, by issue year;
4.) Actuarial assumptions used in the valuation of reserves,
describing the bases for each assumption of:
a.) interest rate;
b.) inflation rate;
c.) withdrawal rate;
d.) contingent benefit availment rate, if applicable;
e.) present actual cost of bene ts as of valuation date, if
applicable;
f.) other pertinent assumptions;
5.) Actuarial formulas and methods used in the valuation of
reserves;
6.) Justi cation for any changes in actuarial assumptions or
methods.
23.2.5. Exhibit B — Summary of Issued Contracts Per Approved Format
23.2.6. Exhibit C — Valuation Results by Product Line Per approved
Format
23.2.7. Exhibit D — Summary of Valuation Results Per Approved Format
23.2.8. Exhibit E — Certi cation and statement of opinion as to the
appropriateness and reasonableness of the assumptions and level
of reserves and that the insurance coverages are valid and in effect
23.2.9. An Actuarial Statement that the Actuary has compared the
amount of actuarial reserves as of the date of valuation to the
amount of the Trust Fund as of the same date and that he has
conducted tests to verify the reasonableness and consistency of the
data used in the actuarial valuation.
23.3. A Sworn Statement from the Insurer certifying the coverages or
guarantees assumed by the insurance company indicating extent, term and duration of
such coverages and/or guarantees.
23.4. Sworn statements from the Trustee/s on the Trust Account/s,
including:
a. Statement that trust account/s are maintained in accordance with a
trust agreement which has been approved by the Commission;
b. Statement that trust account/s are free from liens and encumbrances
other than liabilities indicated in the trust fund statement;
c. The trust fund balance sheet/s as of valuation date, including the
income statement/s for the year and subsidiary schedules that should
identify the specific investments.
23.5. Sworn statements from the responsible o cers of the Pre-Need
Company stating that:
a. The data on which the valuation was based are complete and
accurate;
b. Only withdrawals allowed by the Commission have been made from
the Trust Fund;
c. De ciencies, if any, in the Trust Fund, have been duly addressed, and
proof of the same.aEHIDT
23.6. Schedules showing the data for the last ve (5) years or a shorter
period, if applicable, on the required actuarial reserves, trust fund equity and net
investment rate of return on the trust fund.
23.7. Other subsidiary schedules which the Commission may require, for
purposes of table audit.
23.8. The foregoing certi cations, reports and schedules required shall be
prepared in accordance with the prescribed form.
23.9. The Commission may refer the AVR to an independent actuary for
veri cation but the expenses incurred therefor shall be charged to the issuer, provided,
however, that the AVR herein required shall not be referred by the Commission for
evaluation/comment to an actuary who is connected in whatever capacity with a
competing firm.
23.10. Any de ciency in the Trust Fund shall be covered by the issuer through
additional deposit within thirty (30) days from submission of the actuarial valuation
report or from notice of de ciency whichever is earlier. Any excess in the Trust Fund
may be credited to future deposit requirements.
RULE 24
Quarterly Reportorial Requirements
24.1. Every Pre-Need Company shall le with the Commission, duplicate
copies of its interim periodic reports containing the nancial condition of the Pre-Need
Company on a quarterly basis within forty- ve (45) days after the end of the quarter.
The Statement of Condition shall be prepared in accordance with the Pre-Need Uniform
Chart of Accounts (PNUCA) set forth in these Rules and shall be signed by the
President and Finance Officer of the Pre-Need Company.
24.2. Every Pre-Need Company shall submit a "Trust Fund Statement", which
is a sworn financial report of the Trust Fund, within thirty (30) days from the end of each
quarter. A pro t and loss statement in the maintenance of the Trust Fund assets shall
be attached to the quarterly Trust Fund statement and any reduction in value due to the
expenses shall be covered by additional deposits.
24.3. In the "Trust Fund Statement", marketable securities may be valued at
lower of cost or market or market value provided full disclosure is made of the total
cost and market as of statement date. The incremental value of the blue chip securities
and those listed in the Main Board of a stock exchange may be allowed to cover any
deficiency or future deposit requirement subject to such limitations as may be imposed
by the Commission.
24.4. Every Pre-Need Company shall le a report on Lapsed Plans, Cancelled
Plans and Surrendered Plans within sixty (60) days from the end of every quarter,
reporting the following information:
a.) Name of planholder;
b.) Type of plan;

c.) Number of installment/s paid;
d.) Total payment made;
e.) Name of salesmen/branch;
f.) Proof of Notice to Planholder of the Lapsation or Cancellation of his
Pre-Need Plan.
RULE 25
Monthly Reportorial Requirements
25.1. Within the rst twenty (20) days from the end of the month during
which Pre-Need Plans were sold, every Pre-Need Company shall submit to the
Commission a report under oath executed in its behalf by its Treasurer or any other
officer performing similar functions showing a list of plans sold contains:
i.) the names of the Planholders
ii.) the type of plan purchased by each
iii.) contract price per plan
iv.) maturity value per plan
v.) date of issue per plan
vi.) the total number of plans sold
vii.) the total amount paid thereon and
viii.) the dates of maturity of the plans.
25.2. Within twenty (20) days from the end of each reference month, every
Pre-Need Company shall submit a report to the Commission of deposits made to the
Trust Fund, to be known as the "Monthly Collection Report." The Monthly Collection
should indicate if the amount collected represents the 1st 20% to the 5th 20% of the
Contract Price.
25.3. Every Pre-Need Company shall likewise le, on a monthly basis, a list of
names of all salesmen alphabetically arranged whose services have been terminated.
Such report shall be led within forty- ve (45) days from the end of the month covered
by the report, and shall further contain a list of all salesmen on apprenticeship. Those
who will be noted during the audit as having received commissions in spite of having
been terminated shall be considered as having sold plan without license and imposed
the corresponding penalty.
25.4. A monthly report of the Trust Fund shall be submitted by the TRUSTEE
to the TRUSTOR and the SEC within twenty (20) days after the end of each month for
TRUSTOR'S and SEC's reconciliation purposes and shall include the following:
a.) Balance Sheet
b.) An income statement, three (3) column report to include:
i.) Month to Date income with equivalent ROI
ii.) Year to Date income with equivalent ROI
c.) Return on Investment Computation Schedule
i.) For the Month CHATEa
ii.) Year to Date

d.) Schedule of Earning Assets
e.) Investment Activity Report/Summary of Transactions Schedule
f.) Portfolio Mix Analysis Schedule
g.) Trustee's Certificate on Trust Fund Balance
h.) Such other statements and schedules as may be reasonably
requested by the Trustor
RULE 26
Inspection of Books, Reports and Papers
26.1. The books, records and papers of the issuer shall be subject to
examination by the Commission from time to time to the extent and in the manner
prescribed by the Commission.
26.2. The information and documents required to be included in or led with
the Registration Statement shall be kept current in order to enable the Commission to
determine the operations of the issuer.
RULE 27
Default; Reinstatement Period
Every issuer shall provide in all contracts issued to Planholders a grace period of
at least two (2) months within which to pay unpaid installments. The said grace period
shall be counted from the due date of the rst unpaid installment. Non-payment beyond
the grace period shall render the plans without further force and effect but the
Planholder shall be allowed a period of not less than two (2) years from the lapse of the
grace period within which to reinstate his plan. No cancellation of plans shall be made
by the issuer during such period when reinstatement may be effected. The Issuer must
give written notice to the Planholder that his Plan will lapse if no payment is received
within the grace period or that his Plan will be cancelled if not reinstated within the
reinstatement period. Such written notice must be given prior to the expiration of the
grace period or the reinstatement period as the case may be.
RULE 28
Termination Values
28.1. A Planholder may terminate his In-Force plan at any time by giving
written notice to the issuer.
28.2. A Pre-Need Contract shall contain a schedule of Termination Values to
which the Planholder is entitled upon surrender of his Plan. Such Termination Value
shall be fair, equitable and in compliance with the best practices internationally
approved. The Termination Value shall be computed at the end of each anniversary year
of the Contract and pre-determined by the actuary of the Pre-Need Company upon
application for registration of the Pre-Need Plans with the Commission. CHEIcS
RULE 29
Insurance
29.1. Except for Pre-Need Life Plans, all the terms and conditions applicable
to the insurance contract shall be segregated from the terms and conditions applicable
to the Pre-Need Plan. In conformity with the full disclosure policy of the Commission,
and in accordance with the requirements of the Insurance Commission, the terms and
conditions of insurance bene ts to be provided by the insurance company to the
Planholder shall be contained in the insurance certi cate accompanying the Pre-Need
Plan between the Pre-Need Company and the Planholder.
29.2. Except for Pre-Need Life Plans, the principal insurance bene ts
permitted to be obtained by a Pre-Need Company from a life insurance company are:
a. Group Credit Life Insurance, for the unpaid installments of the
Planholder;
b. Insurance for the waiver of unpaid pre-need installments, due to Total
and Permanent Disability of the Planholder; and
c. Group Yearly Renewable Term Insurance and Accidental Death and
Disability Insurance shall be allowed, subject to guidelines of the
Insurance Commission and the terms and conditions of the master
policy.
29.3. Any application for registration and price increase of Pre-Need Plans
with insurance riders shall be accompanied by a copy of the group insurance master
contracts duly approved by the Insurance Commission covering the insurance taken
with the Pre-Need plans. A copy of the specimen individual certi cates approved by the
Insurance Commission corresponding to the said master contract, shall likewise be
submitted.
29.4. In case of Pre-Need Life Plans, the Pre-Need Company shall obtain
Group Yearly Renewable Term Insurance and Accidental Death and Disability Insurance,
subject to the following conditions:
a.) The cost of the insurance shall be built into the contract price and
paid directly by the Pre-Need Company out of non-trust funds;
b.) The Pre-Need Company is the owner and policyholder of the
insurance policy but the beneficiary/ies are those named in the policy;
c.) The Pre-Need Company shall be liable to its Planholders under the
terms and conditions of the Life Plan Contract, notwithstanding the
insolvency or refusal of the insurance company to pay the insurance
proceeds. Provided, however, that if the claim arises during the
contestability period of the Life Plan Contract, and it is established
that there was concealment and mispresentation of material facts by
the planholder, then the planholder and/or his bene ciaries shall not
be entitle to the benefits of the Life Plan.
RULE 30
Compliance with the Contract
Upon full payment by the Planholder, the issuer shall render to him, his assigns, or
successors-in-interest the services or give the value thereof or deliver the property, or
such other Benefits as stipulated in the Pre-Need Plan.
RULE 31
Pre-Need Uniform Chart of Accounts (PNUCA), Brief Description,
and Their Financial Statements Presentation
31.1. The Pre-Need Uniform Chart of Accounts (PNUCA) in the following
format shall be used by every Pre-Need Company in the accounting and reporting of
their operations and of the Trust Funds for each type of Pre-Need Plan that said
Company is authorized to sell:
1. Balance Sheet Accounts
a. Current Assets
(i) Cash on Hand and in Banks
The caption "cash" or "cash on hand or in banks" includes
currency or cash items on hand (such as cash items
awaiting deposit and cash in working funds) as well as
peso or foreign currency deposit in banks which are
unrestricted and immediately available for use in current
operations. Foreign currency deposits shall be recorded
at their respective foreign currency amounts and at their
local currency equivalent at the applicable rate of
exchange on transaction date. Notes to nancial
statements shall include disclosure of the amount of
foreign currency in US$ equivalent and peso equivalent at
both historical or booking rate and at the applicable
exchange rate at report date.
(ii) Short-Term Investments (Marketable Securities)
This account should include only those securities which
are readily marketable (i.e. such items which represent
temporary investments of funds available for current
operations and are intended to meet working capital
requirements). This account usually includes current
marketable equity securities (e.g. common, preferred
and other capital stock for which there is an active
trading market) and other short-term cash investments
such as investments in bonds, commercial papers,
government obligations and certi cates of deposits.
Redeemable preferred shares and convertible debts,
however, shall be treated as debt instruments and
included in bonds, mortgages, notes and other similar
debt instruments.
The purpose served by the investments is the controlling
factor for its proper nancial statements presentation.
Investments in securities that are marketable are not
normally classi ed among current assets if these are
acquired for purposes of control, a liation or for some
continuing business advantage. Securities which are
readily marketable may be held for several years and still
be properly classi ed as short-term investments if
management intends to sell them for working capital
purposes whenever the need arises.
Marketable equity securities shall be carried at the lower
of its aggregate cost or market value, determined at
balance sheet date. The amount by which aggregate cost
of the portfolio exceeds market value shall be accounted
for as the valuation allowance.
Other short-term investments, on the other hand, should
be reported at cost adjusted for any loss on price decline
of the investments. The allowance for decline in value
should be disclosed.
(iii) Other Receivables
This is a major account comprised of the following
subsidiary accounts:
(A) Insurance Claims Receivables
This refers to company claims from the insurer for
the unpaid balance of installments arising from the
demise or disability of an insured planholder.
(Insurance claim arising from the loss or damage
to company properties or equipment are carried
under "Other Insurance Claims" accounts, a
subsidiary to "Other Receivables.")
(B) Accounts Receivable — Rendered Service
This refers to receivables from planholders
representing the unpaid balance of the gross price
of an assigned plan already serviced.
(C) Receivables from Trust Fund
This account represents advances by the company
for plan bene ts paid to planholders that are
chargeable to the trust fund. This amount must be
deducted from the trust fund.
(D) Advances to DOSRI
This represents cash advances extended by the
company to its Directors, O cers, Stockholders
and Related Interests such as employees,
agencies and agents.
(E) If signi cant in amount, other receivables should
be segregated by type, otherwise, they may be
grouped in one gure captioned as Accounts
Receivable — Others, or another equivalent title.
(iv) Inventories
When applicable, inventories which consist of caskets,
urns and memorial lots are carried at cost.
(v) Other Current Assets
This represents other items not readily and properly
classi ed in any one of the preceding asset captions or
items not su ciently material to warrant a separate
caption. If it is in excess of 5% of total current assets, it
shall be stated separately.
b. Trust Fund
Trust Fund refers to the net asset value in a trust set up in a
duly licensed trustee for providing for the cost of the bene ts
or services to be rendered. The Pre-Need Company deposits
the prescribed portion of the amount paid by the Planholder. At
all times, the net asset value in the trust fund should not be less
than the Actuarial Reserve Liabilities (ARL) as determined by an
actuary accredited by Commission.
The Trust Fund shall be invested only in assets de ned in these
Rules. Assets in the Trust Fund shall be valued based on the
Rules of the Commission and the provisions of SFAS No. 10
"Summary of Generally Accepted Accounting Principles on
Investments," and Exposure Draft (ED) No. 30.
The compositions of the Trust Fund and its movements during
the periods presented should be disclosed in the Notes to
Financial Statements, including relevant investment policies
adopted by the trust company, bank or investment house
administering the fund.
No part of the income from Trust Fund can be used to pay
dividends to stockholders.
Where there is an ambiguity between the amount of Trust Fund
equity reported by the trustee as against amount shown in the
Balance sheet, a reconciliation of the con icting gures
detailing the cause or causes thereof, shall be shown in the
Notes to Financial Statements. ECcDAH
c. Installment Contracts Receivables (ICR)

This represents outstanding account balances arising from
sales of pre-need plans on an installment basis. Installment
contracts receivables include the outstanding unpaid
installments on the Contract Price of In-Force Plans, including
the outstanding unpaid installments of Lapsed but Reinstatable
Plans or Plans in default for not more than two years. Plans
Lapsed for more than two (2) years from lapse of grace period
may be cancelled by the Company subject to prior notice to the
Planholder. Cancelled plans are taken off the books and the
outstanding balances of Cancelled Plans and of Surrendered
Plans are deducted from the installment contracts receivables
account. (The number and total amount of Contract Price of
plans lapsed for a period of two years or less, and the number
and total amount of Contract Price of Lapsed Plans reinstated
during the year should be disclosed in the Notes to Financial
Statements.)
d. Other Investments
Investments that are not readily marketable and are not
intended to meet working capital requirements are classi ed
under this account.
Investments in securities of affiliates and related parties should
be shown separately from other long-term investments in
stocks. Investments in common stock of subsidiaries and
a liated companies should be accounted for based on SFAs
No. 10 and ED No. 30.
e. Property and Equipment
This account shall include all tangible assets that are used in
the conduct of the business and are not intended for sale in the
ordinary course of business and with estimated useful lives
exceeding one year.
Property and Equipment are generally carried at cost less
allowance for depreciation. In case of revaluation, SFA No. 12
should be applied.
Leasehold improvements are included under this caption if
material in amount and if the terms of the lease extend over a
long period of time; otherwise, the amount may be shown
among deferred charges or other assets. They should be
amortized over the remaining term of the lease (including
renewal periods if it is probable that a renewal option will be
exercised) or the life of the property whichever is shorter.
f. Deferred Charges and Other Assets
This account is a major non-current asset grouping in the
Balance Sheet which absorbs subsidiary account balances
amounting to less than ve per cent (5%) of Total Assets. If
more than ve per cent (5%), each subsidiary account shall be
presented separately under this grouping.
Commissions, overrides, and bonuses paid to sales personnel
after January 01, 2002 may be deferred subject to the following
conditions:
i.) Deferral shall be allowed only if the modi ed cash or
accrual method of accounting is used by the Pre-Need
Company;
In case of cash method of accounting, no deferral shall
be allowed.
ii.) In case of pre-need plans with a payment period of ve
(5) years or more, commissions, overrides and bonuses
may be deferred but shall be amortized in accordance
with the following schedule:
Year 1 — 40%
Year 2 — 21%
Balance shall be amortized equally over the remaining
paying period.
iii.) In case of plans with a payment period of less than ve
(5) years, commissions, overrides and bonuses paid may
be deferred but shall be amortized at 50% for the rst
year and the balance shall be amortized over the
remaining paying period.
Commissions, overrides and bonuses paid to sales personnel
before January 01, 2002 which have been deferred by the Pre-
Need Company shall be amortized over the remaining paying
period but in no case beyond ve (5) years from January 01,
2002.
Example of other asset accounts under this classi cation
include, but is not limited to, the following:
(i) Pre-Operating Expenses
This represents actual expenses incurred in establishing
a Pre-Need Company, or in opening a branch o ce
thereof. The cost may include legal fees, promotional
fees, incorporation fees, etc. the combined amount of
which, is amortized normally over a period of ve (5)
years.
(ii) Other Assets
This represents other items not readily and properly
classi ed in any one of the preceding asset captions or
items not su ciently material to warrant a separate
caption. If it is in excess of ve per cent (5%) of total
assets, it must be stated separately.
g. Current Liabilities
(i) Accounts Payable and Accrued Expenses
This is a major grouping among current liabilities in the
Balance Sheet which shall include, but is not limited to,
the following:
(A) Taxes Payable
This represents value added tax, documentary
stamp tax and other taxes payable by the pre-need
company to the government in accordance with RA
8424.
(B) Insurance Premium Payable
This includes liabilities for unpaid premiums on
group insurance of Company's personnel and non-
life insurance premiums for Company's property
and equipment, etc.
(ii) Other Current Liabilities
The following accounts may be stated separately if
material in amount:
(A) Dividends declared and not paid at balance sheet
date
(B) Acceptances payable
(C) Liabilities under trust receipts
(D) Portion of long-term debt due within one year
(E) Any other current liability in excess of ve per
cent (5%) of total current liabilities.
h. Actuarial Reserve Liabilities (ARL)
Actuarial Reserve Liabilities represent the accrued net liabilities
of the Pre-Need Company to its Planholders, as determined and
certi ed by an actuary accredited by the Commission in
accordance with generally accepted actuarial principles and
practices together with the standards and guidelines set by the
Commission; or, in their absence, the actuarial standards and
guidelines of the Actuarial Society of the Philippines, or, in their
absence, the international actuarial principles and standards. In
the determination of the actuarial reserve of any Plan, the
Actuary should take into account the deferred charges. The
actuarial reserve should not be less than the corresponding
Termination or Surrender Value of the Plan and shall be equal to
the amount shown in the Actuarial Valuation Report as required
under Rule 23.2.3.
i. Benefits Payable
This account includes amounts payable to Planholders and
bene ciaries, in the course of settlement, and incurred but not
reported claims on the Pre-Need contract such as due but
unpaid matured bene ts, surrender bene ts and annuity
payments.
j. Planholder's Deposit
(i) Planholder's Deposit — Insurance Premium
Amount collected from the Planholder for the payment of
Planholder's insurance premiums to the insurer.
(ii) Planholder's Deposit — Others
This represents amounts received from the Planholder
for any of the following:
(A) Payment with application for a new plan not yet
issued,
(B) Excess fractional payments of a regular
installment, and
(C) Payment received with application for the
reinstatement of Lapsed Plan, within two years
from date of lapse, with pending approval.
k. Estimated Benefit Provision in ICR
This account represents provision for bene ts and other
related expenses in the outstanding Installment Contracts
Receivable (ICR) of all Plans sold on installment basis, as
prescribed by the actuary in the actuarial pricing study
approved by Commission. This account plus Unrealized Gross
Income (UGI) in ICR shall be at all times equal to ICR.
l. Unrealized Gross Income (UGI) in ICR
This account represents the gross income provision, which is
the difference between ICR and Estimated Bene t Provision.
Therefore, this account plus the Estimated Bene t Provision in
ICR shall be at all times equal to ICR.CASaEc
m. Counselors' Bond Reserve

This account represents the aggregate amount of deductions
from salesmen and agents' commissions, bonuses, and other
cash incentives to accumulate a reserve. Upon separation of a
salesman or agent from the company, his accountability will be
charged to this accumulated bond reserves.
n. Other Liabilities
This represents other items not properly classi ed in any one
of the preceding liability captions or items not su ciently
material to warrant a separate caption. If it is in excess of ve
per cent (5%) of total liabilities, it shall be stated separately.
o. Stockholder's Equity
This is a major section of the Balance Sheet, which consists of,
but is not limited to, the following prime accounts:
(i) Authorized Capital Stock
(ii) Subscribed Capital Stock
(iii) Paid-up Capital Stock
(iv) Additional Paid-in Capital
(v) Retained Earnings
(A) Unappropriated
(B) Appropriated — (shall be specified as to purpose)
Retained earnings cannot be declared as dividends
without prior approval from the Commission.
2. Statement of Income and Retained Earnings
a. Income
(i) Realized Gross Income
This account represents estimated gross income from
collections of Plan contracts. If ICR has been set up, the
amount of realized gross income is determined by
applying the estimated gross income rate used in setting
up the UGI, to the actual collections.
This account is presented in the income statement as the
major source of revenue of pre-need companies.
(ii) Other Operating Income
Under this grouping, the following subsidiary accounts
shall be separately presented:
(A) Handling Fee
This represents handling charges associated with
installment payments other than annual basis or
spot-cash sales. ATESCc
(B) New Issue Fee

This is normally a one-time charge to new
Planholders to cover underwriting and processing
service of the application, which can be a xed
amount or a percentage of the Contract Price.
(C) Amendment Fee
This represents a xed amount or percentage of
the Contract Price charged to Planholders who
apply for amendment of their in-force plans to
cover processing cost and services. This shall also
include reconstruction/re-replacement fee for lost
contracts.
(D) Reinstatement Fee
This represents a xed charge or a percentage of
the Contract Price, charged to Planholders
applying for reinstatement of Lapsed Plans to
cover processing cost and services.
(E) Surcharge on Lapsed Plan
This represents additional charge to Planholders
on past-due installment payments of Lapsed
Plans, and is different and separate from
reinstatement fee.
(iii) Other Income
Under this grouping, the following subsidiary accounts
are separately presented:
(A) Trust Fund Income
This account represents all income generated by
the Trust Fund.
(B) Commission Income
This pertains to commission/referral fees received
by the Pre-Need Company.
(C) Investment/Interest Income
This account refers to the amount of interest from
securities of a liates and unconsolidated
subsidiaries, marketable securities and other
securities held by the Company other than trust
fund income.
(D) Realized Capital Gains
This represents gain or loss on disposal of
securities. Gains are net of losses and losses are
net of gains. Disclose the method followed in
determining cost of securities sold.
(E) Miscellaneous Income
This refers to any material amount of
miscellaneous income net of deductions.
b. Operating Expenses
(i) Plan Benefits
This pertains to bene ts to planholders and/or their
bene ciary/ies, paid and accrued, such as, maturity,
termination bene t, etc.; except bene ts paid from
insurance coverages.
(ii) Increase (Decrease) in Actuarial Reserve Liabilities
This account is equal to the actuarial reserve as
determined by an actuary accredited by the Commission
as at the end of the current year minus the sum of the
reserve as of end of previous year and any additional
actuarial reserve liabilities credited during the year from
installments of Contract Price collected less realized
gross income, and any increase in the reserve on account
of change in valuation basis, if any such change occurred
during the year.
(iii) Direct/Acquisition Costs
This is a major grouping of costs and expenses accounts
immediately related to sales of Pre-Need Plans, and of
acquiring the same. The following subsidiary accounts
shall be presented separately under this grouping.
(A) Commissions, Bonuses, and Incentives
This represents compensation paid to sales
personnel for the production of new business, and
for servicing existing business pursuant to a
formal "Commission Agreement." This
compensation shall not exceed the limit set by the
Commission.
(B) Collection Fees and Bonuses
This covers incentives granted for collection of
non-commissionable installment accounts by
authorized agents. This account may be presented
separately from the account "Commissions,
Bonuses, and Incentives", or as part thereof,
depending upon the materiality of the amount.
Collection fees and bonuses shall not exceed the
limit set by the Commission.
(C) Taxes
This pertains to the taxes paid by the Pre-Need
Company except income tax.
(D) Prizes and Awards
This account includes cost of prizes, awards and
incidental expenses incurred in giving out prizes
and awards, and other bene ts granted to sales
personnel for outstanding achievement in selling
Pre-Need Plans. SDITAC
(E) Securities and Exchange Commission

Registration Fee
This pertains to the registration/ ling fee paid to
the Commission.
(F) General and Administrative Expenses
Expenses not included in the foregoing are
classi ed as "General and Administrative" or
"Management and Operating Expenses" detailed
on the face of the Statement of Income and
Retained Earning, or in a separate listing schedule,
or in the related "Notes to Financial Statement."
RULE 32
Additional Disclosures to the Chart of Accounts
32.1. Where additional explanation of data in the preceding Rule are expected
of the account in the nancial statements, reference to the related "Notes to Financial
Statements" shall be indicated after the account. In the balance sheet, trust funds
account shall re ect a notation "Schedule No. ___" for additional explanation on how the
trust fund equity has been arrived at.
32.2. Due to the high expectation of users of the nancial statements,
information pertaining to total collections for the year shall be shown or disclosed in
the Income Statement, or in the accompanying "Notes to Financial Statements."
32.3. For purposes hereof, "total collections for the year" shall mean gross
collections from payments of the Contract Price of Pre-Need Plans.
RULE 33
Branches, Extension Offices
33.1. Any issuer or general agent desiring to establish or operate a branch,
extension o ce or unit, in any locality, may be so permitted upon prior approval by the
Commission.
33.2. Any change in address, closure or suspension of operation of said
branch, extension office or unit shall require prior approval of the Commission.
33.3. An issuer may be requested to put up additional capital for the
establishment of branches, extension offices or units, in an amount to be determined by
the Commission. AcDHCS
33.4. Processing of applications for establishment, transfer or closure of

branch o ces or extension o ces shall be completed within eight (8) working days
from receipt of complete application and payment of fees.
RULE 34
Closure of Branch Office(s)
34.1. Every Pre-Need Company desiring to close a branch o ce shall secure
the prior approval of the Commission and in connection therewith, shall designate a
resident agent/contact person in the area where the branches for closure are located
who will receive payments of the Planholders to be deposited in the Pre-Need
Company's designated bank account and attend to the Planholders' bene t claims,
queries and complaints against the Pre-Need Company.
34.2. The following shall be submitted together with the application for
closure:
a. A copy of the a davit of conformity of the resident agent/contact
person or an agreement executed by and between the Pre-Need
Company and the resident agent/contact person.
b. A Notice to Planholders duly published informing them of the closure
of the branch and the name and address of the resident
agent/contact person who will attend to their installment payment,
bene t claim, queries and complaints against the pre-need company.
Publication shall be made in a newspaper of local circulation once at
least two (2) weeks before effective date of closure, and the second
publication within five (5) days from closure date.
c. An a davit duly executed by a responsible o cer of the Pre-Need
Company to the effect that: i.) said notice has been sent by registered
mail to all planholders being served by the branch o ce at the last
address shown in the records of the branch and ii.) that said notice
has been posted in the said o ce and in two (2) conspicuous places
in the municipality where the branch office is located.
RULE 35
Prohibited Acts
35.1. As commission, the Pre-Need Company shall not pay in cash or
securities, directly or indirectly, any amount in excess of ten per cent (10%) of the
Contract Price of the plans authorized to be sold, payable only from the proceeds of the
sale thereof, as and when they are actually collected and received by the Issuer, and
provided that the amount of the commission herein granted shall be paid only to duly
registered dealers or agent who effected the sale. However, no payment of
commission shall be made if plans have not been actually sold by the dealers or agents,
but were purchased by the buyers directly from the Pre-Need Company.
35.2. The issuance/sale of Pre-Need Plans in excess of the amount
authorized under a registration granted to the issuer shall be penalized by a ne, in such
amount depending on the frequency of the violation and/or by suspension of operation.
35.3. Overpricing of plans above the amounts stated under said registration
shall be penalized by a fine.
35.4. Financial Statements submitted to the Commission shall adhere strictly
to the PNUCA set forth in these Rules. Any Financial Statement led not in accordance
with the PNUCA shall be considered as not having been led, and subject the Pre-Need
Company to the corresponding penalties imposed by the Commission.
35.5. Any person who issues a false or misleading statement or omits to
state a material fact when required to do so and who prepares certi cations required in
these Rules containing such false or misleading information shall be barred from
practicing his profession in the Commission without prejudice to criminal or civil
liabilities imposed under the Revised Securities Act.
RULE 36
Fee, Fines and Penalties
36.1. The fees, nes and penalties that shall be imposed by the Commission
are as per attached Schedule of Fees, Fines and Penalties which is incorporated as an
integral part of these Rules.
36.2. The imposition of nes and penalties is without prejudice to the civil
and criminal liabilities that may be imposed on the offending party or parties under the
Revised Securities Code.
RULE 37
Exceptions
Upon application by an interested party, the Commission may grant exceptions
to these rules on a case to case basis for meritorious and justi able reasons
established by the applicant and under such terms and conditions as the Commission
may impose.
RULE 38
Repealing Clause
All rules and regulations or any part or provision thereof, inconsistent with these
Rules or any part or provision thereof, are hereby repealed or modified accordingly.
RULE 39
Effectivity
These New Rules shall take effect fteen (15) days after the date of last
publication in two (2) newspapers of general circulation in the Philippines and shall
apply to new plans registered after such effectivity. Insofar as plans registered prior to
the effectivity of these New Rules, the latter shall apply effective April 30, 2002 unless
otherwise provided herein.
August 16, 2001, Mandaluyong City, Philippines.
(SGD.) LILIA R. BAUTISTA

Chairperson
Securities and Exchange Commission
(SGD.) EDIJER A. MARTINEZ

Commissioner
(SGD.) JOSELIA J. POBLADOR

Commissioner
(SGD.) FE ELOISA C. GLORIA

Commissioner
(SGD.) JUANITA E. CUETO

Commissioner
APPENDIX A
I. FEES
A. Registration/Licensing of Securities
1. New and Additional 1/10 of 1% of maximum
aggregate price at which
securities are proposed
to be offered plus other
fees

2. Petition for Price Increase P2,500
3. Petition for amendment of P2,500

Registration Statement/
contracts/all applications
4. Petition for release of balance P2,500
5. Petition for Cancellation of P2,500

Registration
6. Petition for Suspension and/or P2,500

Cancellation of Permit to Sell
B. Dealer/Branch/Salesmen/General Agent
1. New
1.1. Dealer
a. Head Office P10,000 + other fees
b. Branch Office
1) Within Metro Manila P5,000 + other fees
2) Outside Metro Manila P2,500 + other fees
1.2. General Agent P5,000 + other fees
1.3. Salesman
a. Dealer P200/salesman plus
other fees
b. General Agent P200/salesman plus
other fees
2. Renewal
2.1. Dealer
a. Head Office P5,000 plus other fees
b. Branch Office
1) Within Metro Manila P2,500 plus other fees
2) Outside Metro Manila P1,500
2.2 General Agent P2,500 plus other fees

2.3. Salesmen P200/salesman plus
other fees
C. Others
1. Approval of Trust Agreement P2,500
2. Accreditation of Pre-Need P1,000

Actuaries
3. Certifications P300
II. PENALTIES/FINES
A. For Late Filing/Non-filing of Reports
1. Annual Reports
1.1 Audited Financial
Statements P5,000 Basic fines plus
P100/day of delay
1.2. Actuarial Valuation Report P5,000 Basic fine plus

P100/day of delay
2. Other periodic reports

2.1. Monthly P5,000 Basic fine plus
P100/day of delay
2.2. Quarterly P5,000 Basic fine plus

P100/day of delay
2.3. Others P5,000 Basic fine plus

P100/day of delay
B. For other violations
1. Issuance/Sale of Plans in 1st violation — 2/10 of 1% of

Excess of Authorized Amount the aggregate gross price of
the plans sold
2nd violation — 3/10 of 1% of

the aggregate gross price of
the plans sold
3rd violation — 4/10 of 1% of

the aggregate gross price of
the plans sold
4th violation and succeeding

violations — suspension/
revocation of license
2. Overpricing of plans 1st violation — 2/10 of 1% of

the difference between the
authorized plan value

2nd violation —between
the difference 3/10 ofthe
1% of

the difference between the
4th and succeeding

violations — suspension or
3. Unreported sales/collections 1st violation — 2/10 of 1% of

the aggregate gross pre-
need price of the plans sold
2nd violation — 3/10 of 1% of


4th and succeeding

violations — suspension or
4. Late trust Fund Deposit P5,000 Basic fine plus

P100/day of delay
5. Late/Non-Funding of Trust fund P5,000 Basic fine plus

Deficiency P100/day of delay
6. Unauthorized Opening/Transfer/ P2,000/branch

Closure of Branch
7. Unlicensed salesmen Maximum of

P2,000/salesman
8. Late Filing of Renewal of the

following:
8.1. Dealer's License P1,000

8.2. General Agent P1,000
9. Execution of Trust Agreement Maximum of P5,000

without SEC approval
10. Registration Statement with a) Suspension or revocation

untrue statement of a material of its certificate and
fact, or omitted to state any permit to offer securities
material fact required to be b) Fine of no less than
stated therein or necessary to P200 for each day of
make the statements therein not continuing violation but
misleading, or refused to permit not more than P50,000 in
any lawful examination into its aggregate fine
affairs c) Disqualification from
being an officer, member
of the board of directors
or principal stockholder of
an issuer whose
securities are about to be
registered pursuant to the
Pre-Need Rules.

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August 16, 2001

NEW RULES ON THE REGISTRATION AND SALE OF PRE-NEED PLANS UNDER

1.3. "Pre-Need Company" or "issuer" means any corporation registered

iv.) A statement certifying that the plan price/s, scheduled trust

k.) All advertisements need not be approved by the Commission but

14.4. Advertisement in broadcast medium shall likewise clearly emphasize

Collection of the 1st 20% 5% 5%

Collection of the 2nd 20% 10% 10%

Collection of the 3rd 20% 70% 80%

Collection of the 4th 20% 70% 80%

Collection of the 5th 20% 70% 80%

ii.) Investment powers of the trustee with respect to trust

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ii.) Year to Date

c. Installment Contracts Receivables (ICR)

m. Counselors' Bond Reserve

(B) New Issue Fee

(E) Securities and Exchange Commission

33.4. Processing of applications for establishment, transfer or closure of

(SGD.) LILIA R. BAUTISTA

(SGD.) EDIJER A. MARTINEZ

(SGD.) JOSELIA J. POBLADOR

(SGD.) FE ELOISA C. GLORIA

(SGD.) JUANITA E. CUETO

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3. Petition for amendment of P2,500

4. Petition for release of balance P2,500

5. Petition for Cancellation of P2,500

6. Petition for Suspension and/or P2,500

1.2. General Agent P5,000 + other fees

2.2 General Agent P2,500 plus other fees

2. Accreditation of Pre-Need P1,000

1.2. Actuarial Valuation Report P5,000 Basic fine plus

2. Other periodic reports

2.2. Quarterly P5,000 Basic fine plus

2.3. Others P5,000 Basic fine plus

1. Issuance/Sale of Plans in 1st violation — 2/10 of 1% of

2nd violation — 3/10 of 1% of

3rd violation — 4/10 of 1% of

4th violation and succeeding

2. Overpricing of plans 1st violation — 2/10 of 1% of

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authorized plan value

3rd violation — 4/10 of 1% of

4th and succeeding

3. Unreported sales/collections 1st violation — 2/10 of 1% of

2nd violation — 3/10 of 1% of

3rd violation — 4/10 of 1% of

4th and succeeding

4. Late trust Fund Deposit P5,000 Basic fine plus

5. Late/Non-Funding of Trust fund P5,000 Basic fine plus

6. Unauthorized Opening/Transfer/ P2,000/branch

7. Unlicensed salesmen Maximum of

8. Late Filing of Renewal of the

8.1. Dealer's License P1,000

9. Execution of Trust Agreement Maximum of P5,000

10. Registration Statement with a) Suspension or revocation

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