Palace asks public vigilance against fraudulent pre-need firms

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MANILA — The public must be wary about the proliferation of fly-by-night pre-need companies to avoid being victimized by these illegitimate insurance companies, the Palace said on Saturday.

In a radio interview, Deputy Presidential spokesperson Abigail Valte said the Insurance Commission must not only focus on cases against erring pre-need companies but also on new companies entering the market.

“Ang dapat nila talagang binabantayan ay ‘yung mga bago pa. Bago pa magkaroon ng kaso ay siguraduhin na that these companies stay afloat and are not fly-by-night companies (The people should pay attention to new companies, We should make sure that these companies stay afloat and are not fly-by-night companies),” Valte told dzRB Radyo Ng Bayan.

“Isa po ‘yan sa mga trabaho dapat talaga ng Insurance Commission kasi mayroon iyang necessary capitalization at dapat nababantayan din po ‘yung nagiging assets ng mga pre-need companies na ‘yan (That’s one of the job of the Insurance Commission–that the companies have the necessary capitalization and the assets of these pre-need companies should also be monitored).”

Nobody wants a repeat of the bad experiences of those who subscribed to pre-need companies in the past that in the end went bankrupt.

Companies must be guarded by the Insurance Commission, know their capitalization regularly to track whether they remain afloat, according to Valte.

Those applying for licenses must also be scrutinized to determine if they are not fly-by-night entities.

Big companies could also become troublesome, Valte said. For instance, in the case of Prudentialife Plans and College Assurance Plans, two big companies, that defaulted on their obligations because of lack of monitoring after they were set up.

“Ang nangyari nang na-set up na, hinayaan na lang, hindi na nabantayan. So ngayon, kailangan talagang binabantayan (What happens is that when the company’s all set up, they just let them be. So now, they need to be monitored),” she said.

Aside from the Insurance Commission, the Securities and Exchange Commission is also monitoring the operations of pre-need companies.