SEC flip-flopping

Since the onset of the Senate investigation on the pre-need industry, the sole regulator of the industry – the Securities and Exchange Commission – seemed to have wavered on its position on a number of issues presented to it.

The public witnessed how the SEC acted neither here nor there. A case in point is the way SEC dealt with another pre-need company, Permanent Plans Inc.

In the midst of the Senate inquiry, the regulator suspended, without notice and hearing, Permaplans’ license to sell plans last April 20 for alleged violation of the rules covering the mode of settlement of planholder claims. The order came despite an earlier decision by Permaplans to settle claims in an early and orderly manner and pursuant to a March 31 letter from SEC effectively allowing an alternative payment mode acceptable to planholders.

In what is perceived as another knee-jerk order, the SEC on May 6 enjoined trustee banks of Permaplans from allowing withdrawals from its trust fund account without its prior approval. Having the effect of a freeze order on the accounts, the order was issued as an aftermath of a Senate hearing and without first notifying Permaplans thereby stalling payment of pending claims by planholders.

Similarly situated pre-need firms experience the same sudden and unwarranted change of SEC policies.

Now in its ardent desire to settle all claims and pay planhoders in the face of losses it incurred in its trust fund assets due to the financial doldrums, Permaplans was forced to opt for a court-assisted rehabilitation. To protect its creditors and planholders from a situation exacerbated by a reactive regulator, it is asking the Makati court to allow a deferred payment without diminution of benefits and interest-bearing scheme over time.

Considering that Permaplans had sold life and pension plans, its clients need not actually rush to pre terminate their plans. It will be more to the planholders’ advantage if they allow their plans to mature and go along with the court-approved payment mode than to be drawn into panic with the patch-work regulatory announcements. For those who would choose for an early settlement, they may have to content themselves with a proposed cash-asset payment formula. But Permaplans is very apologetic for the inconvenience.

And if we may add, the fumblings at the SEC is contributing to the inconvenience of planholders. While it has clearly permitted an alternative settlement mode for those wishing to pre terminate their plans “with the knowledge and consent of the planholder,” the regulator is now saying that Permaplans cannot employ other means of extinguishing obligations provided for and allowed by existing laws.

The regulator really seems to be wanting.

A new age in RP elections

We just heard that the Comelec is set to award the P11.2-billon contract for the automation of the May 10, 2010, national and local elections this week despite attempts by some quarters to derail the process so that we will go back to the traditional manual voting.

The technical working group of the Comelec special bids and awards committee (SBAC) tested the PCOS machines of the lone qualified bidder, Smartmatic-TIM, and reports are that it passed all of the 26 criteria on the checklist. Smartmatic-TIM was the only bidder left during the final leg of the automation bidding, pegging its bid at P7.19 billion or P4 billion below the total contract amount.

Should Smartmatic-TIM bag the contract, the excess of P4 billion in the supplemental budget will naturally go to Comelec as an inherent funding of the poll body, according to SBAC chair Ferdinand Rafanan.

But the story is far from being over. The consortium of the AMA Group of Companies/ Election Systems and Software cited “lost confidence in the proceedings” when it pulled out of the bidding at the last minute. AMA’s withdrawal had left Smartmatic-TIM as the lone bidder vying for the automation project.

Disqualified companies however are prohibited from lodging protests as they signed a waiver that bars bidders from filing an action against the Comelec.

Aside from the bidders, some politicians are also against the automation and they would rather have the traditional manual elections which is prone to all kinds of cheating.

But there are those who believe that automation will make the electoral process more reflective of the people’s will. Makati Rep. and co-chairman of the joint congressional oversight committee Teddy Boy Locsin said that admittedly, there are those who will be out of business because the machines are not vulnerable to hacking and tampering.

Senator Richard Gordon is also very positive that the automation is well underway as he welcomed reports that the Comelec may announce the winning bidder this week.

He noted that automating the 2010 elections will be a turning point in Philippine democracy because it will mean clean, honest and credible elections that would get the country out of the political rut that it has fallen into.

Gordon, author of the amended Automated Elections System Law, stressed that automated elections will ensure that people’s votes are counted and their voices will be heard. He added that it would also ensure that winning candidates will have the people’s mandate which would mean that they would be unencumbered by electoral protests that hound winning candidates and prevent them from working efficiently.

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