It is more fun criticizing
Only 20 pre need companies are in good health
There were more than a hundred pre need companies at SEC. However, at OIC only 20 remain. The last to be closed by OIC were Permanent and Prudential Life.
And we begin to wonder. Why?
After examining the Pre Need Law RA 9829 or the the Pre Need Code of the Philippines; and examining the Trust Fund requirements:
5% on the first year
15% on the second year
70% on the 3rd to 5th year, the total trust fund contribution is only 46% and with returns of only 0.5 to 3.0% there is a great impossibility of building the fund requirement to meet the financial obligation
It will take a great deal of financial genius to recover the 54% fund deficiency. And if the pre need company does not have a genius, then it is bound to have trust fund that is deficient and can be closed down by OIC.
The law and formula are defective, dont you think so?
