Pre Need Plans PPT Notes
Pre Need Plans PPT Notes
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(g) Willfully allowing the use of one’s license by a non-
licensed or barred individual; and Recovery of No fraud – legal action against the
(h) Analogous circumstances. Investment Pre-need Company
With fraud or illegality – legal
Licensing of Agents action against officers or
Requirements controlling owners
1. Submission of General Agency Agreement and other
documentary requirements Claims Settlement
- must be registered corporation or partnership in the PH IC determines whether the payment of the claim of the
-agents soliciting or selling pre-need plans must possess plan holder has been unreasonably denied or withheld.
the same qualifications as the sales counselors
-must be authorized to receive notices, summons and If found to have denied or withheld the claim, the pre-
legal processes for and in behalf of the pre-need company need company shall be liable to pay damages, consisting
concerned in connection with actions or legal of actual damages, attorney’s fees and legal interest, to
proceedings against said pre-need company be computed from the date the claim is made until it is
fully satisfied.
The application of a general agent shall not be approved
unless a salesman is qualified and licensed by the Other Claims Settlement
commission. The general agent shall cease solicitation i. Knowingly misrepresenting to claimants
and selling of pre-need plans when no natural person pertinent facts or plan provisions relating to
holds a valid license representing the general agent. coverages at issue;
ii. Failing to acknowledge with reasonable
A license issued to a general agent shall authorize only the promptness pertinent communications with
individual or individuals named in the license exercise respect to claims arising under its plan;
iii. Failing to adopt and implement reasonable
What happens if you have a pre-need plan and you're standards for the prompt investigation of
supposed to make payments of the premium but you claims arising under its plan;
defaulted? iv. Failing to provide prompt, fair and equitable
Grace Period - 60 days after default of the 1st installment settlement of claims submitted in which
(default) liability has become reasonably clear; or
Reinstatement Period - not less than 2 years from end of v. Compelling plan holders to institute suits or
grace period recover amounts due under its plan by
Notice of Cancellation - 30 days after lapse of grace period offering, without justifiable reason,
and 30 days before end of reinstatement period substantially less than the amounts
Notice of termination is required from plan holder. ultimately recovered in suits brought by
them.
Any offer by the pre-need company to terminate the pre-
need plan for consideration exceeding the termination Trust Fund
value provided in the plan contract shall not require the In respect of pre-need companies, the trust fund is set up
prior approval of the Commission, provided that (i) the from the plan holders’ payments to pay for the cost of
consideration shall be below the pre-need reserves for benefits and services, termination values payable to the
the specific plan, (ii) the offer is accepted by the pre-need plan holders and other costs necessary to ensure the
plan holders, and (iii) the offer shall not prejudice the delivery of benefits or services to the plan holders as
claim of plan holders who do not avail of such offer. provided for in the contracts. The trust fund is to be
treated as separate and distinct from the paid-up capital
Claims Settlement of the company, and is established with a trustee under a
Period Scheduled benefit plans – trust agreement approved by the Securities and Exchange
Settlement immediately; after 15 days interest Commission to pay the benefits as provided in the pre-
(12%) will be demandable need plans.
Contingent benefit plan – 30 days
after submission of all necessary The term “benefits” used in Section 16.4 is defined as the
documents “money or services which the Pre-Need Company
undertakes to deliver in the future to the plan holder or
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his beneficiary”. Hence, benefits can only mean payments
or services rendered to the plan holders by virtue of the
pre-need contracts.
The CA observed that only the paid value of the MRT III
Bonds should be made part of the trust fund; that with
the MRT III Bonds being subject to the unpaid seller's line,
Smart and FEMI were considered as contributors to the
source of the assets of the trust fund, and for that reason
were not to be treated as ordinary creditors of the
respondent. (SEC v. CAP, 2018)