After reading What are the Pre-Requisites to Incorporation of Pre-Need Companies?, read also What is Republic Act no. 9829 or the Pre-need Code of the Philippines?
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Except upon favorable recommendation of the Insurance Commission, the Securities and Exchange Commission (SEC) shall not accept or approve the articles of incorporation and bylaws of any pre-need company
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A foreign corporation may be allowed to engage in a pre-need business in the Philippines
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Existing pre-need companies shall comply with the minimum unimpaired paid-up capital
In our previous article, we mentioned that a pre-need company refers to any corporation registered with the Insurance Commission (Commission) and authorized/licensed to sell or offer to sell pre-need plans. The term also refers to schools, memorial chapels, banks, nonbank financial institutions and other entities which have also been authorized/licensed to sell or offer to sell pre-need plans insofar as their pre-need activities or business are concerned.
What are the pre-requisites to incorporation or pre-need companies?
The law says:
Except upon favorable recommendation of the Commission, the Securities and Exchange Commission (SEC) shall not accept or approve the articles of incorporation and bylaws of any pre-need company.
As to the amendments to the articles of incorporation and bylaws of a pre-need company, including merger, consolidation and dissolution, the same shall not be approved by the SEC without the favorable recommendation from the Commission.
May a foreign corporation be allowed to engage in a pre-need business in the Philippines?
The law says:
Yes. This is on the condition that the foreign corporation shall comply with the pertinent laws, rules and regulations.
The law states that a pre-need company incorporated after the effectivity of the Pre-need Code of the Philippines shall have a minimum paid-up capital of One Hundred Million Pesos (Php100,000,000.00). Existing pre-need companies shall comply with the following minimum unimpaired paid-up capital:
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One Hundred million pesos (P100, 000,000.00) for companies selling at least three (3) types of plan;
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Seventy – five million pesos (P75, 000,000.00) for companies selling two (2) types of plan; and
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Fifty million pesos (P50, 000,000.00) for companies selling a single type of plan.
Existing pre-need companies with traditional education plans shall have a minimum unimpaired paid-up capital of One hundred million pesos (P100, 000,000.00)
However, the Commission may adopt risk – based principles on capital adequacy based on internationally accepted standards.
Take note that no person shall operate as a pre-need company or engage in the business of a pre-need company unless licensed by the Commission in accordance with the Pre-need Corporation Code of the Philippines.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding illegal dismissal, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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