Emil Aquino, head of the SEC’s Non-Traditional Securities Department, said the guidelines are intended to ensure that pre-need plan firms have a common rule of action compatible with the aims and purposes for which the pre-need industry has signified to achieve.
Aquino said the guidelines will be out by the first week of May this year.
It would be recalled that the Philippine Federation of Pre-need Plan Companies (PFPPC) had come up with its own Code of Conduct as part of efforts to provide better services to planholders.
The PFPPC said that in order for the industry to grow, it needs to maintain the confidence and trust of the public through efficient and diligent compliance of its commitments and adherence to sound, ethical and accepted business principles.
Under the Code of Practice and Ethics, PFPPC members must institute safeguards to ensure that services guaranteed in the plan contract shall be rendered in all aspects by the servicing entity or pre-need agent.
Members are also required to see to it that advertisements are explicit in their claims and are free of misrepresentation.
"Advertisements shall not contain exaggerated or fictitious price comparison, non-existent discounts for savings, nor present price lists which are false and not current.
All prices and benefits quoted shall be accurate so as not to mislead the public by distortion, omission or undue emphasis," the federation said.
Members are prohibited from instructing or encouraging their sales people to switch the plans already sold to planholders of another firm to their plans in order to get the business.
Pre-need firms are also required to have the necessary financial capacity to meet their obligations with the Federation, their planholders, suppliers and servicing entities.
In addition to this, they must promptly remit amounts due the trust funds upon collection from planholders of payment accruing to the trust fund in accordance with existing rules and regulations.
Members are likewise discouraged from engaging in practices that would lead to the dissipation of their assets.
The PFPPC said its members must be prepared to produce evidence before any government regulatory body responsible for the enforcement of the rules and regulations governing pre-need plan companies, in order to substantiate claims that may have given rise to justified complaints.
In cases of complaints, the Committee on Ethics shall hear and decide alleged violations of the Code of Conduct.
If found guilty, the member shall be imposed the corresponding penalties which range from written reprimand to termination of membership.
A fine of not less than P5,000 may also be imposed as additional penalty at the discretion of the committee.
In case of termination of membership, the decision of the committee shall be submitted to the general membership for its approval. A two-thirds vote of the general membership shall be required to affirm the recommendation to terminate.