No complaint against CAP, says SEC head

Securities and Exchange Commission (SEC) Chairperson Lilia Bautista revealed in a recent top-rated talk show interview that no complaints have been lodged against College Assurance Plan (CAP) with regard to its delivery of services and payments to its planholders.

In the same forum, Bautista said that the CAP issue has been blown out of proportion, partly from a lack of understanding of the trust fund.

For its part, CAP management assured that the company is "financially stable." It said that in its more than 20 years of existence not a single planholder has complained of non-payment to planholders.

The pre-need industry leader is set to infuse an additional P2.5 billion in capital to increase total trust funds to over P13 billion in a bid to improve services to planholders.

In a recent statement, the SEC said it "sees no problem" with CAP’s proposal for a trust fund enhancement program subject to the production of required documentation. Bautista also disputed reports that there was a cease-and-desist order against CAP.

It was explained by CAP that before April 30 of every year, pre-need firms are required by the SEC to submit their annual trust fund report as one of the safeguards put in place by the SEC to protect consumers.

Depending on prevailing economic conditions, there are times when fund surpluses or shortfalls occur.

In previous years, when trust fund enhancements were necessary, CAP said it acted with dispatch in boosting the fund to better serve the needs of planholders. "This instance is no different as we are set to boost trust funds with the P2.5-billion infusion," it reiterated.

At present, the SEC has a liquidity requirement for pre-need firms of at least 10 percent of the total trust funds of a company. This is primarily used to pay for current maturing obligations due to the planholder. CAP has liquid investments twice the required amount.

The SEC and the Board of Investments were flooded with calls from planholders expressing support for CAP, and airing their confidence that it will continue to meet its obligations.

CAP has already paid out a total of P6.6 billion to its education planholders graduating over 40,000 students.

Meanwhile, Miguel Madrigal Vasquez, president of the Federation of Pre-Need Plan Companies (PFPPCI) pointed out that the industry is content under SEC regulation, saying that government is working to further improve the state of the industry.

CAP has assured its planholders that "there is no cause for worry" as the company is financially sound and will continue to meet all the needs of planholders as it has done the past years.