REPUBLIC OF THE PHILIPPINES DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS MARITIME INDUSTRY AUTHORITY - IX 2nd Floor, CAP Bldg N.S.

Valderosa St. Zamboanga City Inter-office Memo: To From Subject : : : The Officer-In-Charge, MARINA IX The MIDS II, MARINA IX Report on RDRRMC-IX Meeting cum Christmas Party

Date : December 13, 2010 ______________________________________________________________________________ Undersigned attended the subject meting and thus I am submitting to your end the report on matters taken in the RDRRMC-IX Meeting cum Christmas Party on December 13, 2010. At around 9:40 am, or 40 minutes from the scheduled time (9:00 am.), the program started by an invocation followed by the singing of the Pambansang Awit, acknowledgement of members and guests, calling the meeting to order and the delivery of Welcome Address by Dir. Adriano D. Fuego of the Office of the Civil Defense and Chairman of the Regional Disaster Risk Reduction and Management Council IX. (pls see the attached Order of Business for reference). The meeting proper took place with the presentation of RA 10121 by Dir. Fuego. Among the salient features of RA 10121 is the change of name of the council in the local level from Regional Disaster Coordinating Council to Regional Disaster Risks Reduction and Management Council. Also, it can be recalled that under the old law, Presidential Decree 1566, the Chairman of the Council is the PNP Regional Director with the Regional Director of the RDCC as a co-chair. Under the new law (RA 10121), the Regional Director of the RDRRMC-IX is now the Chairman. The same is true in the national level. The National Disaster Risk Reduction and Management Council is headed by Secretary of National Defense VOLTAIRE T. GAZMIN. The Secretary of DILG and NEDA are only co-chairs. MARINA, being an attached agency of the Department of Transportation and Communications (DOTC) retains its membership in the council. Inasmuch as disasters is not only an individual concern but a national or general concern, MARINA`s role or any agency for that matter remains and continues to be indispensable. Another major development of the law is that the new law now has its teeth, that is it can now penalize any person/s or agency concerned found violating the law and its IRR, with specific reference to the prohibited acts. (pls see the attached law and its IRR for further reference). Also, the Local Government Units are mandated under the law to use its 5% emergency fund for the purpose of preventing, reducing and mitigating disasters even without a final declaration of emergency yet by the President. Under the new law also, the Office of the Civil Defense is mandated to increase the number of its employees from the original number of 6 to 50. Hence, there will be an expected increase of hiring of employees next year or when the IRR will be fully implemented.

Exchange of gifts, socialization and the most awaited part of the program, lunch party
finally highlighted the Order of Business for the last quarterly meeting in 2010. For your information, guidance and reference. JEFFY A. BALURAN

Unionism in the University of the Philippines: A post-Marcos dictatorship gain

Judy M. Taguiwalo, Ph.D.

Introduction Unions are established where an employer-employee relationship exists. The basic concerns of unions are the protection of the rights of employees, the advancement of their economic welfare and improvements in their terms and conditions of work. Public sector unionism in the Philippines is a relatively recent reclaimed right by government personnel in the country. The reclaiming of such a right cannot be divorced from the gains won by the Filipino people in ending the 20-year martial rule when through presidential edict the right of public sector employees to form unions was removed. Prior to the 1987 Philippine Constitution, unionism in the public sector except in government-owned and controlled-corporations was prohibited by Presidential Decree No. 442 or The Labor Code of the Philippines.1 The rights of Filipino government employees to form unions were recognized only after the overthrow of the Marcos dictatorship. These rights are enshrined in the 1987 Philippine Constitution: Article III, Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged; Article IX-B, Sec. 2 (5). The right to self organization shall not be denied to government employees; and Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. The State shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. Executive Order No. 180, issued on June 1, 1987 by then President Corazon Aquino spelled out the scope and limits of public sector unionism.2 Unionism in the University of the Philippines: Beginnings In the University of the Philippines, a number of UP faculty members, administrative staff and research, extension and professional staff banded together in 1987 to exercise the newly recognized right to form a union and established the All-UP Workers Union. Another union composed solely of administrative staff, the Organization of Non-Academic Personnel of UP (ONAPUP) was registered in 1987. There has been no controversy regarding the need for a union of administrative staff of the university. But questions have been raised about the composition of a faculty union in the university.

Unionism in the University of the Philippines: A post-Marcos dictatorship gain

Judy M. Taguiwalo, Ph.D.

Introduction Unions are established where an employer-employee relationship exists. The basic concerns of unions are the protection of the rights of employees, the advancement of their economic welfare and improvements in their terms and conditions of work. Public sector unionism in the Philippines is a relatively recent reclaimed right by government personnel in the country. The reclaiming of such a right cannot be divorced from the gains won by the Filipino people in ending the 20-year martial rule when through presidential edict the right of public sector employees to form unions was removed. Prior to the 1987 Philippine Constitution, unionism in the public sector except in government-owned and controlled-corporations was prohibited by Presidential Decree No. 442 or The Labor Code of the Philippines.1 The rights of Filipino government employees to form unions were recognized only after the overthrow of the Marcos dictatorship. These rights are enshrined in the 1987 Philippine Constitution: Article III, Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged; Article IX-B, Sec. 2 (5). The right to self organization shall not be denied to government employees; and Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. The State shall guarantee the rights of all workers to self-organization, collective bargaining and

negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. Executive Order No. 180, issued on June 1, 1987 by then President Corazon Aquino spelled out the scope and limits of public sector unionism.2 Unionism in the University of the Philippines: Beginnings In the University of the Philippines, a number of UP faculty members, administrative staff and research, extension and professional staff banded together in 1987 to exercise the newly recognized right to form a union and established the All-UP Workers Union. Another union composed solely of administrative staff, the Organization of Non-Academic Personnel of UP (ONAPUP) was registered in 1987. There has been no controversy regarding the need for a union of administrative staff of the university. But questions have been raised about the composition of a faculty union in the university.

CEBU, Philippines - The Commission on Audit (COA) described as highly illegal the granting by the Mactan Cebu International Airport Authority of at least P118,2000 to each of the 10 members of the MCIAA board as collective negotiation agreement bonus. Senior state auditor Anecita Pilapil, tasked to supervise the audit of financial transactions of the airport, claimed that except for airport general manager Danilo Augusto Francia, who received P144,736.44 CNA bonus, other members of the board are not entitled to such benefit. The MCIAA board has 11 members, including Francia. Pilapil said unlike Francia, the 10 other members of the board are not organic personnel of the airport and should not be entitled to the CNA bonus, which was given last month. These 10 board members are representatives from government agencies and the private sector. The CNA is equivalent to the Collective Bargaining Agreement (CBA) in the private sector. Documents obtained by THE FREEMAN showed that the MCIAA had released P1,182,000 CNA bonus to 10 members of the MCIAA board through Cash Voucher dated June 28, 2010. Francias CNA bonus amounting to P144,736 was released through a separate cash voucher. Although his bonus was legal, it was prepared on the same date. The members of the 11-man board, previously chaired by then Department of Transportation and Communication (DOTC) Secretary Leandro Mendoza, rated their performance as very satisfactory in availing themselves of the bonus, which is equivalent to three months salary plus P30,000. The airports rank and file employees are being rated by their supervisors while the supervisors are being rated by the division managers. The division managers are being rated by department managers while the department managers are being rated by the general manager. Every member of the board is being rated by the entire board. Those granted with P118,200 CNA bonus are Mendoza, Cebu Governor Gwendolyn Garcia, Civil Aviation Authority director general Ruben Ciron, Justice Undersecretary Jose Vicente Salazar, Department of Finance director Ma. Lourdes Dedal, private sector representatives Valeriano Avila, Renato Osmea, Gordon Allan Joseph, Winglip Chang and former tourism regional director Patria Auroa Roa. Aside from the CNA bonus, the board had also granted Roa P500,000 severance pay, whose legality is now being investigated by the Office of the Ombudsman-Visayas. Roa is reportedly willing to return the money if the Ombudsman found out that the giving of the severance was illegal. The MCIAA board also granted severance pay to former DOTC Undersecretary Carina Valera in 2003 but COA disallowed such benefit and ordered its refund.

But the MCIAA officials refused to comply with the COAs order. They brought up the issue to the Supreme Court, claiming that the MCIAA charter allowed the granting of retirement benefits to its personnel, including members of the board. Another document obtained by The FREEMAN showed that MCIAA also spent P100,000 (P75,000 intelligence funds and P25,000 extra ordinary allowance that was granted to Francia last month) through Cash Voucher dated June 22, 2010. COA said the release of the intelligence funds needs the approval of the Office of the President. An airport employee said: The release of the P100,000 intelligence funds is anomalous because the same had been previously disallowed by COA during the time of former airport manager Benito Diamos. That time P50,000 raman gani to. Karon sa time ni Francia, gibalik nasab niya gipadak-an pa gyud. Pilapil said MCIAA is still governed by the COA rules contrary to the claim of Francia that they are only complying with the provisions of its charter. However, the board claimed that the giving of benefits to its members is legal. Francia said the board members are officers of the MCIAA because they are part of the management. They are part of management, as officers. So they entitled (to such benefits). Also the Charter is clear on this. The power of the Board is there, Francia said Joseph also supported Francias statement. Let them questioned it because we will also stand to our arguments that under the MCIAA Charter we are entitled to such benefits, he. Meanwhile, Francia and airport lawyers Glen Napuli and Allan Talisaysay appeared before Assistant Ombudsman Virginia Palanca-Santiago for a conference yesterday morning on the controversy surrounding Roas severance pay. Following the meeting, the three refused to say anything to reporters about what was being discussed. Santiago also refused to say anything but assured the media that the Ombudsman has been doing something about the issue. /LPM (THE FREEMAN) __________________

CEBU, Philippines - The Commission on Audit (COA) described as highly illegal the granting by the Mactan Cebu International Airport Authority of at least P118,2000 to each of the 10 members of the MCIAA board as collective negotiation agreement bonus. Senior state auditor Anecita Pilapil, tasked to supervise the audit of financial transactions of the airport, claimed that except for airport general manager Danilo Augusto Francia, who received P144,736.44 CNA bonus, other members of the board are not entitled to such benefit. The MCIAA board has 11 members, including Francia. Pilapil said unlike Francia, the 10 other members of the board are not organic personnel of the airport and should not be entitled to the CNA bonus, which was given last month. These 10 board members are representatives from government agencies and the private sector. The CNA is equivalent to the Collective Bargaining Agreement (CBA) in the private sector. Documents obtained by THE FREEMAN showed that the MCIAA had released P1,182,000 CNA bonus to 10 members of the MCIAA board through Cash Voucher dated June 28, 2010. Francias CNA bonus amounting to P144,736 was released through a separate cash voucher. Although his bonus was legal, it was prepared on the same date.

The members of the 11-man board, previously chaired by then Department of Transportation and Communication (DOTC) Secretary Leandro Mendoza, rated their performance as very satisfactory in availing themselves of the bonus, which is equivalent to three months salary plus P30,000. The airports rank and file employees are being rated by their supervisors while the supervisors are being rated by the division managers. The division managers are being rated by department managers while the department managers are being rated by the general manager. Every member of the board is being rated by the entire board. Those granted with P118,200 CNA bonus are Mendoza, Cebu Governor Gwendolyn Garcia, Civil Aviation Authority director general Ruben Ciron, Justice Undersecretary Jose Vicente Salazar, Department of Finance director Ma. Lourdes Dedal, private sector representatives Valeriano Avila, Renato Osmea, Gordon Allan Joseph, Winglip Chang and former tourism regional director Patria Auroa Roa. Aside from the CNA bonus, the board had also granted Roa P500,000 severance pay, whose legality is now being investigated by the Office of the Ombudsman-Visayas. Roa is reportedly willing to return the money if the Ombudsman found out that the giving of the severance was illegal. The MCIAA board also granted severance pay to former DOTC Undersecretary Carina Valera in 2003 but COA disallowed such benefit and ordered its refund. But the MCIAA officials refused to comply with the COAs order. They brought up the issue to the Supreme Court, claiming that the MCIAA charter allowed the granting of retirement benefits to its personnel, including members of the board. Another document obtained by The FREEMAN showed that MCIAA also spent P100,000 (P75,000 intelligence funds and P25,000 extra ordinary allowance that was granted to Francia last month) through Cash Voucher dated June 22, 2010. COA said the release of the intelligence funds needs the approval of the Office of the President. An airport employee said: The release of the P100,000 intelligence funds is anomalous because the same had been previously disallowed by COA during the time of former airport manager Benito Diamos. That time P50,000 raman gani to. Karon sa time ni Francia, gibalik nasab niya gipadak-an pa gyud. Pilapil said MCIAA is still governed by the COA rules contrary to the claim of Francia that they are only complying with the provisions of its charter. However, the board claimed that the giving of benefits to its members is legal. Francia said the board members are officers of the MCIAA because they are part of the management. They are part of management, as officers. So they entitled (to such benefits). Also the Charter is clear on this. The power of the Board is there, Francia said Joseph also supported Francias statement. Let them questioned it because we will also stand to our arguments that under the MCIAA Charter we are entitled to such benefits, he. Meanwhile, Francia and airport lawyers Glen Napuli and Allan Talisaysay appeared before Assistant Ombudsman Virginia Palanca-Santiago for a conference yesterday morning on the controversy surrounding Roas severance pay. Following the meeting, the three refused to say anything to reporters about what was being discussed. Santiago also refused to say anything but assured the media that the Ombudsman has been doing something about the issue. /LPM (THE FREEMAN)

CEBU, Philippines - The Commission on Audit (COA) described as highly illegal the granting by the Mactan Cebu International Airport Authority of at least P118,2000 to each of the 10 members of the MCIAA board as collective negotiation agreement bonus. Senior state auditor Anecita Pilapil, tasked to supervise the audit of financial transactions of the airport, claimed that except for airport general manager Danilo Augusto Francia, who received P144,736.44 CNA bonus, other members of the board are not entitled to such benefit. The MCIAA board has 11 members, including Francia. Pilapil said unlike Francia, the 10 other members of the board are not organic personnel of the airport and should not be entitled to the CNA bonus, which was given last month. These 10 board members are representatives from government agencies and the private sector. The CNA is equivalent to the Collective Bargaining Agreement (CBA) in the private sector. Documents obtained by THE FREEMAN showed that the MCIAA had released P1,182,000 CNA bonus to 10 members of the MCIAA board through Cash Voucher dated June 28, 2010. Francias CNA bonus amounting to P144,736 was released through a separate cash voucher. Although his bonus was legal, it was prepared on the same date. The members of the 11-man board, previously chaired by then Department of Transportation and Communication (DOTC) Secretary Leandro Mendoza, rated their performance as very satisfactory in availing themselves of the bonus, which is equivalent to three months salary plus P30,000. The airports rank and file employees are being rated by their supervisors while the supervisors are being rated by the division managers. The division managers are being rated by department managers while the department managers are being rated by the general manager. Every member of the board is being rated by the entire board. Those granted with P118,200 CNA bonus are Mendoza, Cebu Governor Gwendolyn Garcia, Civil Aviation Authority director general Ruben Ciron, Justice Undersecretary Jose Vicente Salazar, Department of Finance director Ma. Lourdes Dedal, private sector representatives Valeriano Avila, Renato Osmea, Gordon Allan Joseph, Winglip Chang and former tourism regional director Patria Auroa Roa. Aside from the CNA bonus, the board had also granted Roa P500,000 severance pay, whose legality is now being investigated by the Office of the Ombudsman-Visayas. Roa is reportedly willing to return the money if the Ombudsman found out that the giving of the severance was illegal. The MCIAA board also granted severance pay to former DOTC Undersecretary Carina Valera in 2003 but COA disallowed such benefit and ordered its refund. But the MCIAA officials refused to comply with the COAs order. They brought up the issue to the Supreme Court, claiming that the MCIAA charter allowed the granting of retirement benefits to its personnel, including members of the board. Another document obtained by The FREEMAN showed that MCIAA also spent P100,000 (P75,000 intelligence funds and P25,000 extra ordinary allowance that was granted to Francia last month) through Cash Voucher dated June 22, 2010. COA said the release of the intelligence funds needs the approval of the Office of the President. An airport employee said: The release of the P100,000 intelligence funds is anomalous because the same had been previously disallowed by COA during the time of former airport manager Benito Diamos. That time P50,000 raman gani to. Karon sa time ni Francia, gibalik nasab niya gipadak-an pa gyud.

CEBU, Philippines - The Commission on Audit (COA) described as highly illegal the granting by the Mactan Cebu International Airport Authority of at least P118,2000 to each of the 10 members of the MCIAA board as collective negotiation agreement bonus. Senior state auditor Anecita Pilapil, tasked to supervise the audit of financial transactions of the airport, claimed that except for airport general manager Danilo Augusto Francia, who received P144,736.44 CNA bonus, other members of the board are not entitled to such benefit. The MCIAA board has 11 members, including Francia. Pilapil said unlike Francia, the 10 other members of the board are not organic personnel of the airport and should not be entitled to the CNA bonus, which was given last month. These 10 board members are representatives from government agencies and the private sector. The CNA is equivalent to the Collective Bargaining Agreement (CBA) in the private sector. Documents obtained by THE FREEMAN showed that the MCIAA had released P1,182,000 CNA bonus to 10 members of the MCIAA board through Cash Voucher dated June 28, 2010. Francias CNA bonus amounting to P144,736 was released through a separate cash voucher. Although his bonus was legal, it was prepared on the same date. The members of the 11-man board, previously chaired by then Department of Transportation and Communication (DOTC) Secretary Leandro Mendoza, rated their performance as very satisfactory in availing themselves of the bonus, which is equivalent to three months salary plus P30,000. The airports rank and file employees are being rated by their supervisors while the supervisors are being rated by the division managers. The division managers are being rated by department managers while the department managers are being rated by the general manager. Every member of the board is being rated by the entire board. Those granted with P118,200 CNA bonus are Mendoza, Cebu Governor Gwendolyn Garcia, Civil Aviation Authority director general Ruben Ciron, Justice Undersecretary Jose Vicente Salazar, Department of Finance director Ma. Lourdes Dedal, private sector representatives Valeriano Avila, Renato Osmea, Gordon Allan Joseph, Winglip Chang and former tourism regional director Patria Auroa Roa. Aside from the CNA bonus, the board had also granted Roa P500,000 severance pay, whose legality is now being investigated by the Office of the Ombudsman-Visayas. Roa is reportedly willing to return the money if the Ombudsman found out that the giving of the severance was illegal. The MCIAA board also granted severance pay to former DOTC Undersecretary Carina Valera in 2003 but COA disallowed such benefit and ordered its refund. But the MCIAA officials refused to comply with the COAs order. They brought up the issue to the Supreme Court, claiming that the MCIAA charter allowed the granting of retirement benefits to its personnel, including members of the board. Another document obtained by The FREEMAN showed that MCIAA also spent P100,000 (P75,000 intelligence funds and P25,000 extra ordinary allowance that was granted to Francia last month) through Cash Voucher dated June 22, 2010. COA said the release of the intelligence funds needs the approval of the Office of the President. An airport employee said: The release of the P100,000 intelligence funds is anomalous because the same had been previously disallowed by COA during the time of former airport manager Benito Diamos. That time P50,000 raman gani to. Karon sa time ni Francia, gibalik

What is the role of Insurance Commission? The Insurance Commission is a government agency under the Department of Finance. The Commission supervises and regulates the operations of life and non-life companies, mutual benefit associations, and trusts for charitable uses. It issues licenses to insurance agents, general agents, resident agents, underwriters, brokers, adjusters and actuaries. It has also the authority to suspend or revoke such licenses.

Why does the Government supervise the operations of insurance companies and their representatives? Insurance business exists to serve the public. It is therefore charged with public interest

What is the address of the Insurance Commission? The Insurance Commission is located at 1071 United Nations Avenue, Ermita, Manila, with Tel. # 523-84-61 up to 70 (Trunk Line), 525-20-15 (Office of the Insurance Commissioner), 524-4784 (Office of the Deputy Commissioner), Fax # 522-14-34, and E-mail ocom@insurance.gov.ph.

Who heads the Insurance Commission? Insurance Commissioner

Does the Commission have the power to adjudicate insurance claims and complaints involving any loss, damage or liability? Yes. The Insurance Code, as amended, empowers the Commission to adjudicate insurance claims and complaints involving any loss, damage or liability where the amount involved does not exceed P 100,000.00 for any single claim. Decisions or orders of the Insurance Commission may be appealed to the Appelate Courts.

What other complaints can be filed with the Commission? Informal and administrative complaints against malpractices of insurance companies or agents may also be filed with the Commission. The Commission is ready at all times to render assistance in settling any controversy between an insurance company and a policyholder relating to insurance.

Are pre-need companies offering memorial service plans, educational plans and pension plans fall under the jurisdiction of the Insurance Commission? Yes, pre-need companies offering products similar to insurance are now under the jurisdiction of the Insurance Commission by virtue of Republic Act No. 9829 known as the Pre-Need Code of the Philippines as approved on December 3, 2009. What are the minimum qualifications required of applicants for insurance agents examination? They must be of good moral character and must not have been convicted of any crime involving moral turpitude and also have been trained in the kind of insurance presently contemplated in the license applied for.

Who may be exempted from taking the agents examination? + One who holds a valid and subsisting certificate of authority issued by the Commissioner + One who has successfully completed an academic course and/or training program satisfactory to the Insurance Commissioner, in the kind or kinds of insurance contemplated in the license applied for + One who, because of his previous connection with any insurance company, or with any office or firm handling insurance matters is found by the Insurance Commissioner to be trustworthy and competent to transact the business contemplated in the license applied for.

Who may be insured? Anyone except a public enemy may be insured

What may be an insurable interest in life insurance consist of? Every person has an insurable interest in the life and health: + Of himself, of his spouse and his children; + Of any person on whom he depends wholly or in part for education or support; or in whom he has a pecuniary interest; + Of any person under legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent performance; and + Of any person upon whose life any estate or interest vested in him depends.

What are the two (2) essential policy conditions which if violated will void the entire policy? a) Willful concealment or misrepresentation by the insured of any material fact or circumstance concerning the subject thereof or the interest of the insured therein; and b) Any fraud or false swearing by the insured relating thereto.

What is the difference between suretyship and insurance? In suretyship, three persons or entities are involved: the surety, the principal and the obligee. In insurance, there are only two: the insurer and the insured. In insurance, there is a theoretical distribution of losses over a group or classification of risks, the insurance company assuming the losses of the individual insured. In suretyship, no losses is anticipated as the surety guarantees the obligation of the principal.

In property insurance, is the insured entitled to a return of premium if he should decide to discontinue his policy? Yes, to a proportionate amount corresponding to the unexpired term of the policy; generally under the short period scale provided for in the policy. May the insurance company cancel a policy? If so, how? May the insured cancel a policy? Yes, upon prior notice thereof to the insured. However, no notice of cancellation is effective unless it is based on the occurrence, after the effective date of the policy, of one or more of the following: + Non-payment of premium; + Conviction of a crime arising out of acts increasing the hazard insured against; + discovery of fraud or material misrepresentation; + discovery of willful or reckless act or omission increasing the hazard insured against;

+ physical changes in the property insured which result in the property becoming uninsurable; or + determination by the Commissioner that the continuation of the policy would place the insurer in violation of this Code. The insured may cancel a policy upon notice to the insurer under the terms of the policy.

How soon may the amount of any loss or damage for which an insurer may be liable under a non-life policy be paid? If the insurer refuses or fails to; pay the claim within the time prescribed by law, may the insured collect interest for the duration of the delay? The amount of any loss or damage shall be paid within 30 days after proof of loss is received by the insurer and ascertainment of the loss or damage is made either by agreement between the insured and the insurer or by arbitration; but if such ascertainment is not paid or made within 60 days after such receipt by the insurer of the proof of loss, then the loss or damage shall be paid within 90 days after such receipt. Refusal or failure to pay the loss or damage will entitle the assured to collect interest on the proceeds of the policy for the duration of the delay at the rate of twice the ceiling prescribed by the Monetary Board, unless such failure or refusal to pay is based on the ground the claim is fraudulent.

If the insured has any right of recovery against another party, may he be required to assign such right to the insurance company? Yes, the company may require from the insured an assignment of all rights of recovery against any party for loss to the extent that payment therefore is made by the company.

Once a property is insured, must the insured inform the company of any change of the description, occupation or construction of the property insured. The insured must inform the company of any change thereto, otherwise, the company would be relieved from liability unless the insured before the occurrence of any loss or damage obtained the sanction of the company signified by an endorsement upon the policy.

What is the basis of the value of the insured property at the time of loss? The actual cash value at the time of loss, that is, what it would cost to replace the property.

Is it the duty of an agent to determine the value of the property insured and the amount of insurance to be carried? Explain. No, the value of the property should be determined by the insured, rather than the agent. However, the agent should guard as far as possible against over insurance and should check the amount of insurance in relation to the actual value with the insured.

What are the effects of non-payment of premium? Forfeiture of all rights under the policy.

What is Compulsory Motor Vehicle Liability Insurance? The Insurance Code (as amended) requires this coverage for the registration of motor vehicles. This insurance covers passengers or third parties who may be killed or injured as a result of accidents arising from the use of operation of such vehicles. The maximum amount of benefit under this policy is P50,000.00

What is the meaning of Authorized Driver in a motor vehicle policy? An authorized driver within the meaning of the policy is any of the following: + The insured; or + Any person driving on the Insureds order or with his permission.

What is the purpose of the errors and omissions insurance policy (professional liability or professional indemnity policy) required of insurance or reinsurance broker before a license could be issued. To indemnify the applicant against any claim for breach of duty as insurance broker or reinsurance broker, as the case may be, which may be available against such applicant by reason of any negligent act, error or omission.

What do you understand by the no fault claim? An insurance company issuing the cover shall pay any claim for death or bodily injuries sustained by a passenger or third party without the necessity of proving fault or negligence of any kind. Immediate payment shall be made provided that the total indemnity shall not exceed P10,000.00 upon presentation of the following proofs of loss, namely: 1. police report of accident, and 2. death certificate and evidence sufficient to establish the proper payee, or medical report and evidence of medical or hospital disbursement in respect of which refund is being claimed. Does the no fault claim apply to claims on property wherein the insurance company is under obligation to make payment immediately? No, because the no fault claim applies only to death or bodily injuries and does not respond to claims for third party property damage.

Republic of the Philippines CONGRESS OF THE PHILIPPINES Metro Manila Fourteenth Congress Third Regular Session Begun and held in Metro Manila, on Monday, the twenty - seventh day of July, two thousand nine. Republic Act No. 9829 AN ACT ESTABLISHING THE PRE-NEED CODE OF THE PHILlPPlNES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: CHAPTER I GENERAL PROVISIONS Section 1. Title. - This Act shall be known as the "Pre-need Code of the Philippines". Section 2. Declaration of Policy. - It is the policy of the State to regulate the establishment of pre-need companies and to place their operation on sound, efficient and stable basis to derive the optimum advantage from them in the mobilization of savings and to prevent and mitigate, as far as practicable, practices prejudicial to public interest and the protection of planholders. The State shall hereby regulate, through an empowered agency, pre-need companies based on prudential principles to promote soundness, stability and sustainable growth of the pre-need industry. Section 3. Construction. - Any doubt in the interpretation and implementation of any provision in this Code shall be interpreted in favor of the rights and interests of the planholder. Section 4. Definition of Terms. - Whenever used in this Code, the following terms shall have their respective. meanings; (a) "Commission" "refers to the Insurance Commission. (b) "Pre-need plans" are contracts, agreements, deeds or plans for the benefit of the planholders which provide for the performance of future service/s, payment of monetary considerations or delivery of other benefits at the time of actual need or agreed maturity date, as specified therein, in exchange for cash or installment amounts with or without interest or insurance coverage and includes life, pension, education, interment and other plans, instruments contracts or deeds as may in the future he determined by the Commission. (c) "Pre-need company" refers to any corporation registered with the Commission and authorized/licensed to sell or offer to sell pre-need plans. The term "pre-need company" 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. (d) "Planholder" refers to any natural or juridical person who purchases pre-need plans from a pre-need company for whom or for whose beneficiaries' benefits are to be delivered, as stipulated and guaranteed by the pre-need company. The term includes the assignee, transferee and any successor - in - interest of the planholder. (e) "Beneficiary" refers to the person designated by the planholder as the recipient of the benefits in the pre-need plan. (f) "Contract price" refers to the stipulated price in the pre-need plan.

(g) "Benefits" refers to the payment of monetary considerations and/or performance of future services which the pre-need company undertakes to deliver either to the planholder or his beneficiary at the time of actual need or agreed maturity date, as specified in the_ pre-need plan. (h) "Sales counselors" refers to natural persons who are engaged in the sale of, or offer to sell, or counsel of prospective planholders for the purpose of selling, whether or not on commission basis, pre-need plans upon the authority of the pre-need company. (i) "Affiliate of, or affiliated with, a specified person" refers to a person that directly or indirectly, through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. Exercising control over a legal entity shall mean any one of the following; (1) owning either solely or together with affiliated persons more than twenty - five percent (25%) of the outstanding capital stock of a legal entity; and (2) being an officer or director of such legal entity. (j) "Trust fund" refers to a fund set up from the planholders' payments to pay for the cost of benefits and services, termination values payable to planholders and other costs necessary to ensure the delivery of benefits or services to planholders as provided for in the contracts. (k) "Pre-need reserve liabilities" refers to the measure of the liabilities of the pre-need company for its in - force plans or lapsed plans as of valuation date. (l) "Liquidity reserve" refers to a portion of the trust fund set aside by the trustee to cover benefits due to planholders for the ensuing year. (m) "Fixed value plans" refers to pre-need plans whose 'benefits and costs are fixed and predetermined at the inception or purchase of the plan. (n) "In - force plan" refers to a plan for which the pre-need company has an outstanding obligation for the delivery of benefits or services or payment of termination value. (o) "Lapsed plan" refers to a plan that is delinquent in payment of installments provided for in the contract, the delinquency, of which extends beyond the grace period provided for in the plan or contract. (p) "Cancelled plan" refers to a plan that can no longer be reinstated by reason of delinquency in the payment of installments for more than two (2) years or a longer period as provided in the contract, counted from the expiry of the grace period provided for in the plan or contract.1avvphi1 (q) "Scheduled benefit plans" refers to plans the date of availment of the benefits of which is set at the inception or purchase of the plan. (r) "Contingent benefit plans" refers to plans the timing of the provision of the benefits of which is conditional on the occurrence of the contingency. (s) "Risk - based capital" refers to a method to measure the minimum amount of capital that a pre-need company needs to support its overall business operation. It is used to set capital requirements, considering the size and degree of risk taken by the pre-need company. (t) "BSP" refers to "Bangko Sentral ng Pllipinas". The terms not otherwise defined under this Code shall be construed in their usual and commonly understood trade, business, commercial or investment meaning. CHAPTER II AUTHORITY OF THE COMMISSION

Section 5. Supervision. - All pre-need companies, as defined under this Act, shall be under the primary and exclusive supervision and regulation of the Insurance Commission. The Commission is hereby authorized to provide for its reorganization, to streamline its structure and operations, upgrade its human resource component to enable it to effectively and efficiently perform its functions and exercise its powers under this Code. All - positions of the - Commission shall be governed by compensation and position classification systems and qualification standards approved by the Commission based on a comprehensive job analysis and audit of actual duties and responsibilities. The compensation plan shall be comparable with the prevailing compensation plan in the Bangko Sentral ng Pilipinas (BSP) and other government financial institutions and shall be subject to periodic review by the Commission no more than once every two (2) years without prejudice to yearly merit reviews or increases based on productivity and efficiency. The Commission shall, therefore, be exempt from laws, rules and regulations on compensation, position classification and qualification standards. The Commission shall, however, endeavor to make its system conform as closely as possible with the principles under the Compensation and Position Classification Act of 1989 (Republic Act No. 6758, as amended). The salary and allowances or personal services expense of the employees of the Insurance Commission shall be sourced from the retained amount of the fees, charges and other income derived from the regulation of pre-need companies and from the Insurance Fund under Section 418 of the Insurance Code of the Philippines (Presidential Decree No. 612, as amended) and Section 286 of the National Internal Revenue Code. If the personal services expense cannot be covered by the retained amount and the Insurance Fund, it shall be appropriated in the General Appropriations Fund. Section 6. Powers and Functions of the Commission. - The Commission shall, at all times, act with transparency and dispatch and shall have, among others, the following powers and functions; (a) Approve, amend, renew or deny any license, registration or certificate issued under this Code; (b) Fix and assess fees and/or charges as it may find reasonable in the exercise of regulation; (c) Regulate, supervise and monitor the operations and management of pre-need companies to ensure compliance with the provisions of this Code, existing laws, rules and regulations including, but not limited to: (1) Revoking or nullifying investments made and/or entered into by a - pre-need company or a trustee which are contrary to existing laws, rules and regulations; (2) Demanding for the conversion of the investments made by the trustee to cash or other liquid assets to protect the interest of the planholders; and (3) Regulating, investigating or supervising activities of pre-need companies, their officers, employees, sales counselors, consultants or agents; (d) Issue cease and desist orders to prevent fraud and injury to the investing public; (e) Issue subpoena duces tecum and ad testificandum, order the examination, search and seizure of documents, papers, files, tax returns, books of accounts and other records, in whatever form, of any entity or person under investigation; (f) Punish for contempt of the Commission, both direct and indirect, in accordance with the pertinent provisions of and penalties prescribed by the Rules of Court; (g) Impose sanctions, institute cases and/or prosecute offenders for violation of this Code, related laws, rules, regulations and orders issued pursuant thereto; (h) Suspend or revoke licenseslawph!l

(i) Enlist the aid and support of and/or deputize any and all enforcement agencies of the government in the implementation of its powers and in the exercise of its functions under this Code; (j) Take over pre-need companies which fail to comply with this Code, related laws, rules, regulations and orders issued pursuant thereto, either through the appointment of a conservator, receiver or liquidator; (k) Prepare, approve, amend or repeal rules, regulations and orders, and issue opinions and provide guidance on and supervise compliance with such rules, regulations and orders; (l) Formulate policies and recommendations on issues concerning the pre-need industry, including proposed legislations; (m) Retain and utilize, in addition to its annual budget, an amount up to One hundred million pesos (Pl00, 000,000.00) of the fees, charges and other income derived from the regulation of the pre-need companies; and (n) Exercise such other powers as may be provided by law as well as those which may be implied from, or which are necessary or incidental to carry out the express powers granted the Commission to achieve the objectives and purposes of the law. CHAPTER III ORGANIZATION, LICENSING AND MANAGEMENT OF PRE-NEED COMPANIES Section 7. Prerequisites to Incorporation. - 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. A foreign corporation may be allowed to engage in a pre-need business in the Philippines: Provided, That it shall comply with the pertinent laws, rules and regulations. Section 8. Amendment of the Articles of Incorporation and Bylaws. - Amendments to the articles of incorporation and bylaws of a pre-need company, including merger, consolidation and dissolution, shall not be approved by the SEC without the favorable recommendation from the Commission. Section 9. Paid-up Capital. - A pre-need company incorporated after the effectivity of this Code shall have a minimum paid - up capital of One hundred million pesos (P100, 000,000.00). Existing pre-need companies shall comply with the following minimum unimpaired paid - up capital: (a) One Hundred million pesos (P100, 000,000.00) for companies selling at least three(3) types of plan; (b) Seventy - five million pesos (P75, 000,000.00) for companies selling two (2) types of plan; and (c) Fifty million pesos (P50, 000,000.00) for companies selling a single type of plan.1avvphi1 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) The Commission may adopt risk - based principles on capital adequacy based on internationally accepted standards. In the exercise of its authority under this paragraph, the Commission may prescribe a higher minimum unimpaired paid - up capital for pre-need companies. Section 10. Licensing of Pre-need Companies. 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 this Code.

The license under this section shall expire one (1) year from the time of the registration. It may be renewed upon compliance with the prescribed requirements of the Commission. Such renewal shall be deemed approved if not acted upon within thirty (30) days from the time of filing of the application for renewal. Section 11. Qualification and Disqualification of Directors and Officers. - To maintain the quality of management of pre-need companies and afford better protection to planholders and beneficiaries, the Commission shall prescribe, pass upon and review the qualifications and disqualifications of individuals elected or appointed directors or officers of pre-need companies, including its actuaries, and disqualify those found unfit. The Commission may disqualify, suspend or remove any director or officer who commits or omits an act which renders him unfit for the position. In determining whether an individual is fit and proper to hold the position of a director or officer of a pre-need company, regard shall be given to his integrity, experience, education, training and competence. The following persons, and those determined by the Commission to be unfit, shall in no case be allowed to serve or act in the capacity of an officer, employee, director, consultant or sales counselor of any pre-need company: (a) Any person convicted of any crime involving any pre-need plan, security or financial product; (b) Any person convicted of an offense involving moral turpitude or involving fraud or embezzlement, theft, estafa or other fraudulent acts or transactions; (c) Any person who, by reason of any misconduct, is enjoined by order, judgment or decree by any court, quasi - judicial body or administrative agency of competent jurisdiction from acting as a director, officer, employee, consultant, agent or occupying any fiduciary position; (d) Any person found by the Commission to have willfully violated or willfully aided, abetted, counseled, commanded, induced or procured the violation of this Code, the Insurance Code, the Securities Regulation Code or any related laws and any rules or orders thereunder; (e) Any person judicially declared to be insolvent or incapacitated to contract; and (f) Any person found guilty by a foreign court, regulatory authority or government agency of the acts or violations similar to any of the acts or misconduct enumerated in the foregoing paragraphs: Provided, That conviction in the first instance shall be considered as sufficient ground for disqualification. Section 12. Independent Directors. Pre-need companies shall have at least two (2) independent directors or twenty percent (20%) of the members of the board, whichever is higher. For this purpose an "independent director" shall refer to a person other than an officer, employee or any person having a fiduciary relation to the pre-need company, its parent or subsidiaries, or any other individual having a relationship therewith, which may interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Section 13. Investment Restrictions of Directors and Officers. No director or officer of any pre-need company shall, after his election or appointment as such, directly or indirectly, for himself or as the representatives or agent of others, have an investment in excess of Five million pesos (P5, 000,000.00) in any corporation or business undertaking in which the pre-need companys trust fund has an investment in or has a financial interest with. No relatives of directors or officers of the pre-need company within the fourth degree of consanguinity or affinity shall, directly or indirectly, have an investment of more than Five million pesos (P5, 000,000.00) in any corporation or business undertaking in which the pre-need companys trust fund has an investment in or has a financial interest with during the incumbency or term of the director or officer involved. CHAPTER IV REGISTRATION OF PRE-NEED PLANS

Section 14. Registration of Pre-need Contracts/Plans. Within a period of forty - five (45) days after the grant of a license to do business as a pre-need company, and for every pre-need plan which the pre-need company intends to offer for sale to the public, the pre-need company shall file with the Commission a registration statement for the sale of pre-need plans pursuant to this Code. The Commission shall promulgate rules governing the registration of pre-need plans and the required documents which include, among others, the viability study with certification, under oath, of a pre-need brochure, a copy of the pre-need plan, and information and documents necessary to ensure the protection of planholders and the general public. Said rules shall further set forth the conditions under which such registration may be denied revoked, suspended or withdrawn, and the remedies of pre-need companies in such instances. Section 15. Registration Requirements. The Commission shall set forth the requirements for registration of pre-need plans and shall require the following documents, among others; (a) Duly accomplished Registration Statements; (b) Board resolution authorizing the registration of applicants pre-need plans; (c) Opinion of independent counsel on the legality of the issue; (d) Audited financial statements; (e) Viability study with certification, under oath, of pre-need actuary accredited by the Commission; (f) Copy of the proposed pre-need plan; and (g) Sample of sales materials. Such registration statements and sales materials required under this section shall contain the appropriate risk factors as may be determined by the Commission. Section 16. Accreditation of Actuary. - The Commission shall have the power to set standards for the accreditation of actuaries directly responsible for the preparation and certification of the viability study of the pre-need plan submitted by the pre-need company for registration or amendment with the Commission. It shall further have the power to define the obligations and liabilities of actuaries accredited by it. No actuary engaged by a pre-need company shall at the same time be a stockholder or serve as a director of the board, chief executive officer or chief financial officer of the company or any such position that the Commission may determine to have an inherent conflict of interest to the position of an actuary. Section 17. Approval of Contract Forms. All forms, including amendments thereto, relating to the pre-need plans shall be approved by the Commission. No pre-need contracts or certificates shall be issued or delivered within the Philippines unless in the form previously approved by the Commission. Section 18. Pre-need Advertising Rules. - Pre-need plans shall be advertised and sold in an appropriate non - misleading manner in accordance with the rules to be prescribed by the Commission. It shall be unlawful for any pre-need company to advertise itself or its pre-need plans unless the Commission has approved such advertising material. The Commission shall have a period of ten (10) working days to approve or deny the advertising material and failure to act within the said period shall cause the advertising material to be approved. For purposes hereof, the Commission shall have the power to define the scope of its advertising rules to appropriately cover advertising or other communications to the public. Any person who sells or offers to sell any pre-need plan or contract by any means or instruments of communication in violation of this section shall be liable to the person purchasing such preneed contract who may sue to recover the consideration paid for such pre-need contract with interest thereon. In addition hereto, the Commission shall have the power to pursue the erring pre-need company in an administrative or criminal proceeding.

A fine of One hundred thousand pesos (P100, 000,000.00) shall be imposed on any pre-need company found to have violated this section: Provided, That a second violation of this section shall, in addition to the fine imposed, result in the suspension of the license of the pre-need company. Section 19. Disclosures to Prospective Planholders. - No registered pre-need plan shall be sold to prospective planholders unless an information brochure, which has been filed with the Commission, has been provided to the purchaser. The information brochure shall contain an explanation of the principal features of the pre-need plan, a statement that the planholder may avail of a default or reinstatement period within which to reinstate his lapsed plan, and the conditions of the same and the rates of return for scheduled benefit plans and illustrative yields for contingent benefit plans; and such other information that the Commission shall require by rule. CHAPTER V LICENSING OF SALES COUNSELORS AND GENERAL AGENTS Section 20. Licensing of Sales Counselors. - No sales counselor shall be allowed to solicit, sell or offer to sell pre-need plans under this Code without being licensed as such by the Commission. No license shall be issued unless the following qualifications have been complied with: (a) The applicant must be of good moral character and must not have been convicted of any crime involving moral turpitude; (b) The applicant has undergone a training program approved by the Commission and such fact has been certified under oath by a duly authorized representative of a pre-need company; and (c) The applicant has passed a written examination administered by the. Commission: Provided, That the administration of the examination may be delegated to an independent organization under the supervision of the Commission. Such license shall automatically expire every thirtieth (30th) day of June or such date of every year as may be fixed by the Commission and may be accordingly renewed. Section 21. Denial, Suspension, Revocation of License. - An application for the issuance or renewal of a license to act as sales counselor may be denied, or such license, if already issued, shall be suspended or revoked based on the following grounds: (a) Materially misrepresented statements in the application requirements; (b) Obtained or attempted to obtain a license by fraud or misrepresentation; (c) Materially misrepresented the terms and conditions of pre-need plan which he sold or offered to sell; (d) Solicited, sold or attempted to solicit or sell a pre-need plan by means of false or misleading representation and other fraudulent means; (e) Terminated for cause from another pre-need company; (f) Similar grounds found in Section II of this Code; (g) Willfully allowing the use of one's license by a non - licensed or barred individual; and (h) Analogous circumstances. Section 22. Licensing of General Agents. - If the issuer should contract the services of a general agent to undertake the sales of its plans, such general agent shall be required to be licensed as such with the Commission, in accordance with the requirements imposed by the Commission.

CHAPTER VI DEFAULT AND TERMINATION BY PLANHOLDERS Section 23. Default; Reinstatement Period. - The pre-need company must provide in all contracts issued to planholders a grace period of at least sixty (60) days within which to pay accrued installments, counted from the due date of the first unpaid installment. Nonpayment of a plan within the grace period shall render the plan a lapsed plan. Any payment by the planholder after the grace period shall be reimbursed forthwith, unless the planholder duly reinstates the plan. The planholder shall be allowed a period of not less than two (2) years from the lapse of the grace period or a longer period as provided in the contract within which to reinstate his plan. No cancellation of plans shall be made by the issuer during such period when reinstatement may be effected. Within thirty (30) days from the expiration of the grace period and within thirty (30) days from the expiration of the reinstatement period, which is two (2) years from the lapse of the grace period, the pre-need company shall give written notice to the planholder that his plan will be cancelled if not reinstated within two (2) years. Failure to give either of the required notices shall preclude the pre-need company from treating the plans as cancelled. Section 24. Termination of Pre-need Plans. - A planholder may terminate his pre-need plan at any time by giving written notice to the issuer. A pre-need plan shall contain a schedule of termination values to which the planholder is entitled to upon termination. Such schedule of termination value shall be required for all in - force preneed plans and shall be fair, equitable and in compliance with the Commission issuances. The termination value of the pre-need plan shall be predetermined by the actuary of the pre-need company upon application for registration of the pre-need plans with the Commission and shall be disclosed in the contract. CHAPTER VII CLAIMS SETTLEMENT Section 25. Unfair Claims Settlement Practices. - (a) No pre-need company shall refuse, without just cause, to pay or settle claims arising under coverages provided by its plans nor shall any such company engage in unfair claim settlement practices. Any of the following acts by a preneed company, if committed without just cause, shall constitute unfair claims settlement practices: (1) Knowingly misrepresenting to claimants pertinent facts or plan provisions relating to coverages at issue; (2) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its plan; (3) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under its plan; (4) Failing to provide prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear; or (5) Compelling planholders to institute suits or recover amounts due under its plan by offering, without justifiable reason, substantially less than the amounts ultimately recovered in suits brought by them. (b) Evidence as to the number and types of valid and justifiable complaints to the Commission against a pre-need company shall be deemed admissible in an administrative or judicial proceeding brought under this section. (c) Any violation of this section shall be considered sufficient cause for the suspension or revocation of the company's certificate of authority.

Section 26. Payment of Plan Proceeds. - In the case of scheduled benefit plans, the proceeds of the plan shall be paid immediately upon maturity of the contract, unless such proceeds are made payable in installments or as an annuity, in which case the installments or annuities shall be paid as they become due. Refusal or failure to pay the claim within fifteen (15) days from maturity or due date will entitle the beneficiary to collect interest on the proceeds of the plan for the duration of the delay at the rate twice the legal interest unless such failure or refusal to pay is based on the ground that the claim is fraudulent: Provided, That the planholder has duly complied with the documentary requirements of the pre-need company. In the case of contingent benefit plans, the benefits shall be paid by the pre-need company thirty (30) days upon submission of all necessary documents. Section 27. Recovery of Investment. The planholder may institute the necessary legal action in court to recover his/her investment in the pre-need company thirty (30) days upon submission of all necessary documents. However, in case the insolvency or bankruptcy is a mere cover - up for fraud or illegality, the planholder may institute the legal action directly against the officers and/or controlling owners of the said pre-need company. Section 28. Consequences of Delay or Default. In case of any litigation for the enforcement of any pre-need plan, it shall be the duty of the Commission to determine whether the payment of the claim of the planholder has been unreasonably denied or withheld. If found to have unreasonably denied or withheld the claim, the pre-need company shall be liable to pay damages, consisting of actual damages, attorneys fees and legal interest, to be computed from the date the claim is made until it is fully satisfied: Provided, That the failure to pay any such claim within the time prescribed in Section 26 hereof shall be considered prima facie evidence of unreasonable delay in payment. Section 29. Distribution of Profits. A pre-need company may declare divided: Provided, That the following shall remain unimpaired, as certified under oath by the president and the treasurer with respect to items (a) and (b); and in the case of item (c), by the trust officer: (a) One hundred percent (100%) of the capital stock; (b) An amount sufficient to pay all net losses reported, or in the course of settlement, and all liabilities for expenses and taxes; and (c) Trust fund. Any dividend declared under the preceding paragraph shall be reported to the Commission within thirty (30) days after such declaration. CHAPTER VIII TRUST FUND Section 30. Trust Fund. - To ensure the delivery of the guaranteed benefits and services provided under a pre-need plan contract, a trust fund per pre-need plan category shall be established. A portion of the installment payment collected shall be deposited by the pre-need company in the trust fund, the amount of which will be as determined by the actuary based on the viability study of the pre-need plan approved by the Commission. Assets in the trust fund shall at all times remain for the sole benefit of the planholders. At no time shall any part of the trust fund be used for or diverted to any purpose other than for the exclusive benefit of the planholders. In no case shall the trust fund assets be used to satisfy claims of other creditors of the pre-need company. The provision of any law to the contrary notwithstanding, in case of insolvency of the pre-need company, the general creditors shall not be entitled to the trust fund. Except for the payment of the cost of benefits or services, the termination values payable to the planholders, the insurance premium payments for insurance - funded benefits of memorial life plans and other costs necessary to ensure the delivery of benefits or services to planholders, no withdrawal shall be made from the trust fund unless approved by the Commission. The benefits received by the planholders shall be exempt from all taxes and the trust fund shall not be held

liable for attachment, garnishment, levy or seizure by or under any legal or equitable processes except to pay for the debt of the planholder to the benefit plan or that arising from criminal liability imposed in a criminal action. The trust fund shall at all times be sufficient to cover the required pre-need reserve. Section 31. Deposits to the Trust Fund. (a) The pre-need company shall make monthly deposits to the trust fund in an amount determined by the accredited actuary, sufficient to pay the benefits promised under the contract. For plans paid for in full, the pre-need company shall deposit into the trust fund at least forty - five percent (45%) for life plans and fifty - one percent (51%) for education and pension plans of said full payment or such higher amount as determine by the actuary. In case of installment payments, the minimum limits of the deposit contributions to the trust fund, unless the viability study done by the actuary requires otherwise, shall be in accordance with the following schedule: Life Plans Other Plans Collection of the 1st 20% of Contract Price Collection of the 2nd 20% of Contract Price Collection of the 3rd 20% of Contract Price Collection of the 4th 20% of Contract Price Collection of the 5th 20% of Contract Price 5% 10% 70% 70% 70% 5% 10% 80% 80% 80%

Contributions to the trust fund shall not form part of the income or gross receipts of the pre-need company and, therefore, shall not be available for dividend declaration or payment to creditors. (b) The deposits to the trust fund shall be made within twenty (20) days from the end of each reference month for payments received from plans whether paid for in full or in installments. Failure to make the trust fund deposit shall subject the pre-need company to administrative liability as provided for under this Code. (c) Should the Commission discover a deficiency in the trust fund, it shall give notice of the same to the pre-need company and require the said company to make additional deposits. The pre-need company shall have thirty (30) days from receipt of notice to make the said deposits and correct the deficiency. Failure to pay the deficiency inspite of notice by the Commission shall subject the pre-need company to the payment of a penalty, in addition to other sanctions imposable under this Code. (d) For plans sold prior to the effectivity of this law, the minimum contributions to the trust fund shall be governed by rules and regulations in force at the time of sale. Section 32. Terms and Conditions of a Trust Fund. - A trust fund must be established separately for each type of pre-need plan with the trust department of a trust company, bank or investment house doing business in the Philippines. No trust fund shall be established by a pre-need company with an affiliate trust entity subject to Section 38 hereof. The trust agreement shall be submitted to the Commission for approval before execution and shall contain the following salient provisions, among others: (a) The manner in which the trust fund is to be operated; (b) Investment powers of the trustee with respect to trust deposits, including the character and kind of investment; (c) Auditing and settlement of accounts of the trustee with respect to the trust fund;

(d) Basis upon which the trust fund may be terminated; (e) Provisions for withdrawals from the trust fund; (f) That the trustee shall submit to the power of the Commission to examine and verify the trust fund; (g) An undertaking by the trustee that it shall abide by the rules and regulations of the Commission with respect to the trust fund; and (h) An undertaking by the trustee that it shall submit such other data or information as may be prescribed by the Commission. Section 33. Responsibilities of the Trustee. - The trustee shall: (a) Administer and manage the trust fund with utmost good faith, care and prudence required by a fiduciary relationship; (b) The trustee shall have the exclusive management and control over the funds and the right at any time to sell, convert, invest, change, transfer or otherwise change or dispose of the assets comprising the funds within the parameters prescribed, by the pre-need company and provided these parameters are compliant with the Commission's regulations; and (c) Not use the trust fund to invest in or extend any loan or credit accommodation to the pre-need company, its directors, officers, stockholders, and related interests as well as to persons or enterprises controlling, owned or controlled by, or under common control with said company, its directors, officers, stockholders and related interests except for entities which are direct providers of pre-need companies. Section 34. Investment of the Trust Fund. - To ensure the liquidity of the trust fund to guarantee the delivery of the benefits provided for under the plan contract and likewise obtain sufficient capital growth to meet the growing actuarial reserve liabilities, all investments of the trust fund/s of a pre-need company shall be limited to the following and subject to limitations, to wit: (a) Fixed income instruments. - These may be classified into short - term and long - term instruments. The instrument is short - term if the maturity period is three hundred sixty five (365) days or less. This category includes: (1) Government securities which shall not be less than ten percent (10%) of the trust fund amount; (2) Savings/time deposits and unit investment trust funds maintained with and managed by a duly authorized bank with satisfactory examination rating as of the last examination by the BSP; (3) Commercial papers duly registered with the SEC with a credit rating of "1" for short - term and "A.AA" for long - term based on the rating scale of an accredited Philippine Rating Agency or its equivalent at the time of investment. The maximum exposure to long - term commercial papers shall not exceed fifteen percent (15%) of the total trust fund amount while the exposure to each commercial paper issuer shall not exceed ten percent (10%) of the allocated amount; and (4) Direct loans to corporations which are financially stable, profitable for the last three (3) years and have a good track record of paying their previous loans. These loans shall be fully secured by a real estate mortgage up to the extent of sixty percent (60%) of the zonal valuation of the property at the time the loan was granted.

The property shall be covered by a transfer certificate of title registered in the name of the mortgagor and free from liens and encumbrances. The maximum amount to be allocated for direct loans shall not exceed five percent (5%) of the total trust fund amount while the amount to be granted to each corporate borrower shall not exceed ten percent (10%) of the amount allocated. The maximum term of the loan should be no longer than four (4) years. Direct loans to planholders are exempt from the limitations set forth under this section: Provided, That such loans to planholders shall not exceed ten percent (10%) of the total trust fund amount. (b) Equities. - Investments in equities shall be limited to stocks listed on the main board of a local stock exchange. Investments in duly registered collective investment instruments such as mutual funds are allowed hereunder: Provided, That such funds are invested only in fixed income instruments and blue chips securities, subject to the limitations prescribed by laws, rules and regulations. These investments shall include stocks issued by companies that are financially stable, actively traded, possess good track record of growth and have declared dividends for the past three (3) years. Notwithstanding the prohibition against transactions with directors, officers, stockholders and related interests, the trustee may invest in equities of companies related to the trustee provided these companies comply with the foregoing criteria provided in this paragraph for equity investments. The amount to be allocated for this purpose shall not exceed thirty percent (30%) of the total trust fund while the investment in any particular issue shall not exceed ten percent (10%) of the allocated amount. The investment shall be recorded at the aggregate of the lower of cost or market. Existing investments which are not in accordance herewith shall be disposed of within three (3) years from the effectivity of this Act. (c) Real Estate. - These shall include real estate properties located in strategic areas of cities and first class municipalities. The transfer certificate of title (TCT) shall be in the name of the seller, free from liens and encumbrances and shall be transferred in the name of the trustee in trust for the planholders unless the seller/transferor is the pre-need company wherein an annotation to the TCT relative to the sale/transfer may be allowed. It shall be recorded at acquisition cost. However, the real estate shall be appraised every three (3) years by a licensed real estate appraiser, accredited by the Philippine Association of Real Estate Appraisers, to reflect the increase or decrease in the value of the property. In case the appraisal would result in an increase in the value, only sixty percent (60%) of the appraisal increase is allowed to be recorded in the books of the trust fund but in case of decline in value, the entire decline shall be recorded. Appraisal increment should not be used to cover up the required monthly contribution to the trust fund. The total recorded value of the real estate investment shall not exceed ten percent (10%) of the total trust fund amount of the pre-need company. In the event that the existing real estate investment exceeds the aforesaid limit, the same shall be leveled off to the prescribed limit within three (3) years from the effectivity of this Code. I Investment of the trust fund, which is not in accordance with the preceding paragraphs, shall not be allowed unless the prior written approval of the Commission had been secured: Provided, further, That no deposit or investment in any single entity shall exceed fifteen percent (15%) of the total value of the trust fund: Provided, finally, That the Commission is authorized to adjust the percentage allocation per category set forth herein not in excess of two percentage (2%) points upward or downward and no oftener

than once every five (5) years. The first adjustment hereunder may be made no earlier than five (5) years from the effectivity of this Act. The pre-need company shall not use the trust fund to extend any loan to or to invest in its directors, stockholders, officers or its affiliates. Section 35. Valuation of Reserve Liabilities of the Pre-need Company. - To determine the sufficiency and adequacy of the fund, an annual pre-need reserve valuation report establishing the reserve requirement and contractual liabilities of the pre-need company shall be made and submitted to the Commission, within one hundred twenty (120) days from end of the calendar year. The valuation report shall contain the assumptions, methodology, formulas used, a summary of the pre-need plans that were subject of valuation and the results of such valuation. The report shall be duly certified to by a professional as may be determined by the Commission. Upon approval by the Commission of the reserve computation, any deficiency in the fund shall be covered by the pre-need company, in the manner as may be prescribed by the Commission. In case of an excess of the fund over the reserve liability, the excess shall be credited for future deposit requirements. Section 36. Trust Fund Deficiencies. - Upon approval by the Commission of the pre-need reserve computation submitted in the preceding section, any deficiency in the trust fund, when compared to the reserve liabilities as reported in the pre-need reserve valuation report, shall be funded by the pre-need company within sixty (60) days from such approval. Failure to cover the deficiency in an appropriate manner within the time required shall subject the pre-need company to the payment of a penalty, in addition to other remedies exercisable by the Commission, as provided for in this Code. Any excess of the trust fund over the actuarial reserve liabilities may be credited to future deposit requirements. Section 37. Liquidity Reserve. - The trustee shall at all times maintain a liquidity reserve which shall be sufficient to cover at least fifteen percent (15%) of the trust fund but in no case less than one hundred twenty - five percent (125%) of the amount of the availing plans for the succeeding year. For this purpose, the pre-need company shall timely submit to the trustee a summary of benefits payable for the succeeding year. The following shall qualify as investments for the liquidity reserve: (a) Loans secured by a hold - out on assignment or pledge deposits maintained either with the trustee or other banks, or of deposit substitute of the trustee itself or mortgage and chattel mortgage bonds issued by the trustee; (b) Treasury notes or bills, other government securities or bonds, and such other evidences or indebtedness or obligations the servicing and repayment of which are fully guaranteed by the Republic of the Philippines; (c) Repurchase agreements with any of those mentioned in Item "b" above, as underlying instruments thereof; and (d) Savings or time deposits with government - owned banks or commercial banks. Section 38. Trustees. - Upon approval of the Commission or when the Commission requires for the protection of planholders, the pre-need company shall entrust the management and administration of the trust fund to any reputable bank's trust department, trust company or any entity - authorized to perform trust functions in the Philippines: Provided, That no director and/or officer of the affiliate or related trust entity: Provided, further, That no trust fund shall be established by a pre-need company with a subsidiary, affiliate or related trust entity. However, such may be allowed: Provided, That the following conditions are complied with: (a) A written approval of the Commission has been previously obtained; and (b) Public disclosure of the affiliation with the trust entity be included in all materials in whatever form.

The Commission shall have the authority to prescribe appropriate rules that shall ensure that the yield of the trust fund is maximized, consistent with the requirements of safety and liquidity. CHAPTER IX ACTUARIES FOR PRE-NEED COMPANIES Section 39. Required Actuarial Reports. - The following documents which are from time to time submitted to the Commission by a pre-need company shall be duly certified by an Insurance Commission accredited actuary: (a) Actuarial valuation of all Iiabilities pertaining to pre-need contracts; (b) Asset share studies when applying for approval of new products or enhancement or repricing of existing products; (c) Accounts in the financial statement of the pre-need company pertaining to actuarial reserve liabilities and other actuarial reserve items; (d) Financial projections showing the probable income and reserve requirements, enumerating the actuarial assumptions and bases of projections; and (e) Such other reports as may be required by the Commission. It shall be the duty of an actuary to immediately report to the Commission any matter contained in arising out of or in relation to the above reports requiring intervention of the Commission to protect the interests of planholders: Provided, That the actuary shall not be liable to the pre-need company for any acts done under this paragraph, unless there is a clear showing of bad faith, malice or gross negligence. Section 40. Disaccreditation of an Actuary. - An actuary shall be disaccredited by the Commission on the following grounds: (a) Failure to adequately perform his required functions and duties under this Code; (b) Failure to meet the requirements of Section 11 of this Code; (c) Failure to disclose conflict of interest; (d) Failure to comply with the Code of Conduct of the Actuarial Society of the Philippines; or (e) Such other grounds that may be determined by the Commission. CHAPTER X REPORTS AND EXAMINATION Section 41. Annual Pre-need Reserve Valuation Report. Every pre-need company shall annually determine its reserve requirement and contractual liabilities, and submit to the Commission an annual pre-need reserve valuation report within one hundred twenty (120) days from the end of the fiscal year of the pre-need company. The valuation report shall contain the assumptions, methodology, formulas used, a summary of the pre-need plans that were the subject of the valuation and the results of such valuation. The report should be duly certified by an actuary accredited by the Commission in the case of contingent plans such as memorial/life plans and by the pre-need company's external auditors or by a qualified actuary in the case of scheduled benefit plans such as pre-need pension and education plans, the liabilities of which are not actuarial in nature. The reserving formula, bases and limits of the assumptions to be used in the valuation of reserves shall be prescribed by the Commission. The Commission may require any pre-need company to submit an interim pre-need reserve valuation report if any of the following events occurred:

(a) When there is sufficient evidence that a subsequent event or transaction occurred after the end of the fiscal year and such event would materially affect the computation of the pre-need reserve valuation report submitted; and (b) When the company ceased operation six (6) months after the end of the fiscal year. Section 42. Annual Audited Financial Statements. - Every pre-need company shall terminate its fiscal period on the thirty - first (31") day of December every year. Within one hundred twenty (120) days after the calendar or fiscal year, the pre-need company shall render to the Commission annual financial statements signed and sworn to by its chief executive officer, chief finance officer and external auditors in accordance with a uniform accounting system that shall be prescribed by the Commission, showing in such form and details the exact condition of its affairs. The audited financial statements should be accompanied by the Statement of Management's Responsibility signed under oath by the companys chairman of the board, chief executive officer and chief financial officer, containing the following declaration: "The management of (name of the pre-need company) is responsible for all information and representations contained in the financial statements for the year(s) ended (date). The financial statements have been prepared in conformity with rules and regulations of the Commission on accounting and reflect amounts that are based on the best estimates and informed judgment of management with an appropriate consideration to materiality." "In this regard, management maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition and liabilities are recognized. The management likewise discloses to the company's audit committee and to its external auditor: (i) all significant deficiencies in the design or operation of internal controls that could adversely affect its ability to record, process, and report financial data; (ii) material weaknesses in the internal controls; and (iii) any fraud that involves management or other employees who exercise significant roles in internal controls." "The board of directors reviews the financial statements before such statements are approved and submitted to the stockholders of the company. "The (name of the auditing firm), the independent auditors appointed by the stockholders, has examined the financial statements of the company in accordance with generally accepted auditing standards in the Philippines and has expressed its opinion on the fairness of the presentation upon completion of such examination, in its report to the board of directors and stockholders." Any material omission of disclosures, misstatement or misleading information found in the financial statements, whether interim or annual, shall constitute a violation of this Code and the officer signing such statement shall be subject to the penalty provided for under this Code and such other sanctions as may be imposed by the Commission. Section 43. Annual Statement of Trust Fund. - Every pre-need company shall file with the Commission an annual statement of its trust fund for each type of plan. Such statement shall be in a form prescribed by .the Commission and shall include details as to all of the income, disbursements, assets and liability items of and associated with the said trust fund accounts. Said statement shall be made under oath by two (2) officers of the company and shall be filed simultaneously with the annual statement required by the preceding section. Where the trust fund is managed and administered by a trustee as provided under Section 80 - of this Code, an annual statement of trust fund for each type of plan shall instead be filed with the Commission. It shall include details such as the income, disbursements, assets and liability items, and shall be certified under oath by at least two (2) of the highest ranking officers of the trustee. Section 44. Publication of Annual Statement. - Within thirty (30) days after receipt of the annual statement approved by the Commission, every pre-need company shall publish in two (2) newspapers of general circulation a full synopsis of its annual financial statements, including the

trust fund annual statement showing fully the conditions of its business, and setting forth its resources and liabilities in a standardized format to be designed by the Commission. The Commission may require pre-need companies to create and maintain a website wherein its planholders may readily access updated information pertaining to the status of financial condition and results of information of the company. The sufficiency and truthfulness of the contents of such website shall be the responsibility of the company. Section 45. Keeping of Records. - The Commission shall require every pre-need company to keep its books, records, accounts and vouchers in such manner that the Commission's authorized representatives may readily verify the company's annual statements and ascertain whether the company is solvent and has complied with the provisions of this Code or the circulars, instructions, rulings or decisions of the Commission. Section 46. Examination. The Commission shall, at least once a year and whenever it considers that the public interest so demands, cause an examination to be made into the affairs, financial condition and method of business of every pre-need company, and of any other person, firm or corporation managing the fund or affairs and/or property of such pre-need company. Such examination shall be carried in a manner prescribed by the Commission by rule. CHAPTER XI FINANCIAL ACCOUNTING STANDARDS Section 47. Accounting Rules and Regulations for Pre-need Plans. - The Commission shall have the authority to make, amend and rescind such accounting rules and regulations applicable for pre-need companies. The Commission may prescribe, among other things, the form or forms in which required information shall be set forth, the items or details to be shown in the components of the financial statements, and the recognition and measurement basis to be adopted for each account, after considering the nature of the operation of the pre-need industry. Pre-need companies shall strictly comply with such accounting rules and regulations as prescribed by the Commission. CHAPTER XII SUSPENSION OR REVOCATION OF AUTHORITY Section 48. Suspension; Grounds. - If the Commission is of the opinion, upon examination or other evidence, that any pre-need company is in an unsound condition, or that it has failed to comply with the provisions of law or regulations, or that its condition or method of business is such as to render its proceedings hazardous to the public or to its planholders, or that its paid - up capital stock is impaired or deficient, the Commission is authorized to suspend or revoke all certificates of authority granted to such pre-need company, its officers and agents, after due notice or hearing. No new business shall thereafter be done by such company or for such company by its agent in the Philippines. The Commission may not lift the order of suspension or revocation of the said authority until the concerned pre-need company shall have submitted a viable business plan showing the companys estimated receipts and disbursements, as well as the basis therefor for the next succeeding three (3) years. CHAPTER XIII CONSERVATORSHIP AND PROCEEDINGS UPON INSOLVENCY Section 49. Appointment of Conservator. If at any time before or after the suspension or revocation of the license of a pre-need company as provided in Section 27 hereof, the Commission finds that such company is in a state of continuing inability or unwillingness to comply with the requirements of the Code and/or orders of the Commission, a conservator may be appointed to take charge of the assets, liabilities, and the management of such company, collect all moneys and debts due the company and exercise all powers necessary to preserve the assets of the company, reorganize its management, and restore its viability. The conservator shall have the power to overrule or revoke the actions of the previous management and board of directors of the said company, any provision of law, or of the articles of incorporation or bylaws of the company, to the contrary notwithstanding, and such other powers as the Commission shall

deem necessary. The conservator may be another pre-need company, by officer or officers of such company, or any other competent and qualified person, firm or corporation. The remuneration of the conservator and other expenses attendant to the conservation shall be borne by the pre-need company. The conservator shall not be subject to any action, claim or demand by, or liability to, any person in respect of anything done or omitted to be done in good faith in the exercise, or in connection with the exercise, of the powers conferred on the conservator. The conservator appointed shall report and be responsible to the Commission until such time as the Commission is satisfied that the pre-need company can continue to operate .on its own and the conservatorship shall likewise be terminated should the Commission, on the basis of the report of the conservator or of his own findings, determine that the continuance in business of the pre-need company would be hazardous to planholders and creditors, in which case the provisions of Chapter XVI shall apply. Section 50. Proceedings upon Insolvency. - Whenever, upon examination or other evidence, it shall be disclosed that the condition of any pre-need company is one of insolvency, or that its continuance in business would be hazardous to its planholders and creditors, the Commission shall forthwith order the company to cease and desist from transacting business and shall designate a receiver to immediately take charge of its trust fund, assets and liabilities, as expeditiously as possible collect and gather all the assets and administer the same for the benefit of its planholders and creditors, and exercise all the powers necessary for these purposes including, but not limited to, bringing suits and foreclosing mortgages in the name of the preneed company. The Commission shall thereupon determine within thirty (30) days whether the pre-need company may be reorganized or otherwise placed in such condition so that it may be permitted to resume business with safety to its planholders and creditors and shall prescribe the conditions under which such resumption of business shall take place as well as the time for fulfillment of such conditions. In such case, the expenses and fees in the collection and administration of the pre-need company shall be determined by the Commission and shall be paid out of the assets of such company. If the Commission shall determine and confirm within the said period that the pre-need company is insolvent, as defined hereunder, it shall, if the public interest so requires, order its liquidation, indicate the manner of its liquidation and approve a liquidation plan and implement it immediately. The Commission shall designate a competent and qualified person as liquidator who shall take over the functions of the receiver previously designated and, with all convenient speed, distribute the trust fund exclusively to the planholders in proportion to termination values of their respective pre-need plans, convert the assets of the pre-need company to cash, or sell, assign or otherwise dispose of the same to the planholders, creditors and other parties for the purpose of settling the liabilities or paying the debts of such company and he may, in the name of the company. institute such actions as may be necessary in the appropriate court to collect and recover accounts and assets of the pre-need company, and to do such other acts as may be necessary to complete the liquidation as ordered by the Commission. The provisions of any law to the contrary notwithstanding the actions of the Commission under this section shall be final and executory, and can be set aside by the court upon petition by the company and only if there is convincing proof that the action is plainly arbitrary and made in bad faith. The Commission shall then file the corresponding answer reciting the proceeding taken and praying for the assistance of the court in the liquidation of the company. No restraining order or injunction shall be issued by the court enjoining the Commission from implementing his actions under this section, unless there is convincing proof that the action of the Commission is plainly arbitrary and made in bad faith and the petitioner files a bond in favor of the Commission with the court in an amount fixed by it. The restraining order or injunction shall be refused or, if granted, shall be dissolved upon filing by the Commission, if he so desires, of a bond in an amount twice the amount of the bond of the petitioner conditioned that it will pay the damages which the petition may suffer by the refusal or the dissolution of the injunction. The court shall give preference to all proceedings under this chapter. The Commission shall not be required to pay any fee to any public officer for filing, recording or in any manner authenticating any paper or instrument relating to the proceedings.

As used in this title, the term "insolvency" shall refer to the financial condition of a pre-need company that is generally unable to pay its liabilities as they fall due in the ordinary course of business or that has liabilities that are greater than its assets. In case of liquidation of a pre-need company, after payment of the cost of the proceedings, including reasonable expenses and fees incurred in the liquidation to be allowed by the court, the Commission shall pay all allowed claims against such company, under order of the court, in accordance with their legal priority. The receiver or the liquidator, as the case may be, designated under the provisions of this title shall not be subject to any action, claim or demand by, or liability to, any person in respect of anything done or omitted to be done in good faith in the exercise, or in connection with the exercise, of the powers conferred on such receiver or liquidator. Section 51. Commission's Power to Assume Trustee Functions. - In cases where the Commission has ordered the liquidation of the pre-need company, the Commission may immediately take custody of the trust fund established by the pre-need company, and the pre-need company shall forthwith deliver custody and an accounting of the same. Henceforth, the Commission shall have the full power and control over the fund to satisfy the pre-need company's obligations to planholders. Section 52. Liquidation. - (a) In cases where the Commission determines that the pre-need company shall be liquidated, it shall have the power to commence insolvency proceedings in the appropriate court which shall have jurisdiction over the assets of the pre-need company, excluding trust fund assets that have been established exclusively for the benefit of planholders. (b) Proceedings in court shall proceed independently of proceedings in the Commission for the liquidation of claims, and creditors of the pre-need company shall have no personality whatsoever in the Commission proceedings to litigate their claims against the trust funds. (c) In liquidating claims of planholders, the Commission shall ensure that all planholders receive an equitable distribution of their claims, considering the amounts each has paid into their plans, the termination values due each planholder, the present value of their claims and other equitable considerations. The only other claims which may be satisfied by the Commission out of the trust funds are the claims for trustees fees which are reasonable and can be shown to have been incurred in the administration of the trust fund, and taxes incurred under trust. CHAPTER XIV ADMINISTRATIVE SANCTIONS AND CRIMINAL PENALTIES Section 53. Administrative Sanctions. (a) The Commission, after proper notice and hearing, may impose any or all of the sanctions provided in subparagraph (b) of this section for the following offenses: (1) the making of any untrue statement of a material fact in a registration statement, information brochure and its supporting papers and other reports required to be filed with the Commission; (2) the failure to disclose any material fact required to be stated therein; (3) the refusal to permit any lawful examination into its affairs; and (4) any violation of this Code or its implementing rules and regulations. (b) The imposition of the foregoing administrative sanctions shall be without prejudice to the filing of criminal charges against the individual responsible for the violation: (1) Cease and Desist Order. - The Commission may, motu proprio or upon verified complaint by any party, issue a cease and desist order (CDO) against any pre-need company upon proof, after due notice and hearing, of violation of any provision of this Code: Provided, That such CDO may be issued ex parte if the violation is clearly apparent, injurious to a number of planholders and requires immediate intervention by the Commission. The CDO shall specifically enjoin the pre-need company from performing certain activities and shall impose fines and state the required remedial actions. All proceedings before the issuance of the CDO shall be confidential;

(2) Suspension of License. - The Commission shall issue a suspension order against the pre-need company if it fails to comply with the CDO within thirty (30) days from issuance thereof; (3) Revocation of License. - The Commission may issue a revocation order of the license of the pre-need company under suspension for a period of ninety (90) days; (4) A fine of not less than Ten thousand pesos (P10, 000.00) nor more than One million pesos (P1, 000,000.00) plus not more than Two thousand pesos (P2, 000.00) for each day of continuing violation; (5) Disqualification from being an officer, a member of the board of directors or principal stockholders of a pre-need company; or (6) Other penalties within the power of the Commission under existing laws. (c) The unauthorized sale of pre-need plans shall subject the issuer to a fine as follows: (1) First violation - thirty percent (30%) of the aggregate gross pre-need price of the plans sold; (2) Second violation - forty percent (40%) of the aggregate gross pre-need price of the plans sold; and (3) Third violation - suspension or revocation of license. Failure to pay fines within three (3) months from receipt of notice to pay will cause the Commission to issue a suspension order. Section 54. Criminal Penalties. - The following acts are criminal in nature: (a) Selling or offering to sell a pre-need plan by unregistered persons shall be penalized by imprisonment of one (1) year and a fine equivalent to triple the contract price; (b) Selling or offering to sell an unregistered pre-need plan or any product that has preneed plan features shall be penalized by imprisonment of one (1) year and a fine equivalent to triple the indicated price; (c) Soliciting, selling or offering to sell a pre-need plan by means of false or misleading representation and other fraudulent means shall be penalized by imprisonment of six (6) years and one (1) day to twelve (12) years and a fine in the amount of Fifty thousand pesos (P50,000.00) to Five hundred thousand pesos (P500, 000.00); (d) Any negligent act or omission that is prejudicial or injurious to the planholder shall be penalized by imprisonment of one (1) year and one (1) day to six (6) years and a fine in the amount of Fifty thousand pesos (P50, 000.00) to Five hundred thousand pesos (P500,000.00); (e) Any fraudulent act or omission that is prejudicial or injurious to the planholder shall be penalized by imprisonment of six (6) years and one (1) day to twelve (12) years and a fine in the amount of One hundred thousand pesos (P100, 000.00) to One million pesos (P1, 000,000.00); and (f) Willful violation of the provisions of this Code or orders of the Commission: Provided, That repeated violations shall constitute prima facie evidence against the offender and shall be penalized by imprisonment of six (6) years and one (1) day to twelve (12) years and a fine in the amount of One hundred thousand pesos (P100, 000.00) to One million pesos (P1, 000,000.00). Any person who violates any other provisions of this Code or rules and regulations promulgated by the Commission under authority thereof shall, upon conviction, be punished by a fine of not

less than Fifty thousand pesos (P50, 000.00) nor more than Five million pesos (P5,000,000.00) or imprisonment of not less than one (1) year nor more than fourteen (14) years, or both, at the discretion of the court. Should the offense be committed by a juridical person, the penalty may, in the discretion .of the court, be imposed on such juridical entity and upon the officer or officers of the juridical entity responsible for the violation. If such officer is an alien, he shall, in addition to the penalties prescribed, be deported without further proceedings after service of sentence. CHAPTER XV MISCELLANEOUS PROVISIONS Section 55. Claims. - The Commission shall have the primary and exclusive power to adjudicate any and all claims involving pre-need plans. If the amount of benefits does not exceed One hundred thousand pesos (P100, 000.00), the decision of the Commission shall be final and executory. Section 56. Review of Commission Orders or Decisions. - Any person aggrieved by an order or decision of the Commission, whether in relation to its settlement of a claim of a planholder or in the exercise of its regulatory authority, may appeal the order or decision to the Court of Appeals by petition for review in accordance with the pertinent provisions of the Rules of Court. Section 57. Transitory Provisions. - Any pre-need company who, at the time of the effectivity of this Code has been registered and licensed to sell pre-need plans and similar contracts, shall be considered registered and licensed under the provision of this Code and its implementing rules and regulations and shall be subject to and governed by the provisions hereof: Provided, however, That compliance for all sections with the exception of Section 21, may be deferred for such reasonable time as the Commission may determine but not to exceed one (1) year unless otherwise specifically provided in this Code. With respect to Chapter IV, compliance will cover all new plans sold one hundred twenty (120) days after the effectivity of this law. Violations committed prior to the effectivity of this Code shall be punished in accordance with the provisions of the laws then in force. The Commission shall constitute forthwith a special team of experts to handle all matters related to the pre-need industry and shall secure and transfer all the files and records of the SEC to the Insurance Commission within ninety (90) days after the effectivity of this Code. Notwithstanding any provision to the contrary, all pending claims, complaints and cases filed with the SEC shall be continued in its full and final conclusion. It shall also assist the Department of Justice in criminal cases involving matters related to the pre-need industry. Section 58. Implementing Rules and Regulations. - The Commission shall adopt such rules and regulations for the proper and effective implementation of this Code within sixty (60) days from approval hereof. The Commission shall publish once a week for two (2) consecutive weeks in two (2) newspapers of general circulation the, rules and regulations promulgated pursuant to the preceding section. Section 59. Effect on Existing Law. Any person, natural or juridical, or pre-need plan, authorized, licensed or registered by the SEC under the Securities Regulation Code shall be deemed to have been licensed or registered under the provisions of this Code. Such person or plan shall, unless otherwise herein provided, be given a period of one (1) year from the effectivity of this Code within which to comply with the same. The rights and remedies provided by this Code shall be in addition to any and all other rights and remedies that exist under existing laws. Section 60. Separability Clause. - Should any provision of this Act or the application thereof to any person or circumstance be held invalid, the other provisions or sections of this Act shall not be affected thereby. Section 61. Repealing Clause. - All acts, laws, executive orders and/or rules and regulations or any part thereof that are inconsistent with the provisions of this Code are hereby repealed or modified accordingly. Section 62. Effectivity. - This Act shall take effect upon its approval.

Approved, PROSPERO C. NOGRALES Speaker of the House of Representatives JUAN PONCE ENRILE President of the Senate

This Act which is a consolidation of Senate Bill No. 2077 and House Bill No. 6407 was finally passed by the Senate and the House of Representatives on September 30, 2009 and September 29, 2009, respectively. MARILYN B. BARUA-YAP Secretary General House of Representatives Approved: DEC. 03, 2009 GLORIA MACAPAGAL - ARROYO President of the Philippines EMMA LIRIO-REYES Secretary of the Senate

IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9829, OTHERWISE KNOWN AS THE PRE-NEED CODE OF THE PHILIPPINES
Pursuant to the authority vested in the Insurance Commission under Section 58 of the Pre-Need Code, the following Rules and Regulations are hereby promulgated:

RULE I GENERAL PROVISIONS

Sec. 1. Title. These rules shall be referred to as the implementing rules and regulations of Republic Act no. 9829, otherwise known as the Pre-need Code of the Philippines. Sec. 2. Objectives. These rules are promulgated consistent with the policy of the State to: (a) Regulate the establishment of pre-need companies and place their operation on sound, efficient and stable basis; (b) Derive the optimum advantage from them in the mobilization of savings; (c) Prevent and mitigate, as far as practicable, for the protection of planholders practices prejudicial to public interest; and (d) Regulate, through an empowered agency, pre-need companies based on prudential principles to promote soundness, stability and sustainable growth of the pre-need industry. Sec. 3. Constraction. Any doubt in the interpretation and implementation of any provision of these rules shall be interpreted in favor of the rights and interests of the planholder. Sec. 4. Definition of Terms. For purposes of this Implementing Rules and Regulations, the following terms, words phrases shall mean and be understood as follows: (a) Actuary a professional duly accredited by the Insurance Commission, who, among other things, deals with the financial impact of risk and uncertainty and who has been trained in mathematics and statistics in calculating premiums, dividends, pensions, reserves, employee benefits and risks. (b) Affiliate of, or affiliated with, a specified person - a person that directly or indirectly, through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. Exercising control over a legal entity shall mean any one of the following: (1) owning either solely or together with affiliated persons more than twenty-five percent (25%) of the outstanding capital stock of a legal entity; (2) being an officer or director of such legal entity. (c) Beneficiary - the person designated by the planholder as the recipient of the benefits in the pre-need plan. (d) Benefits - payment of monetary considerations and/or performance of future services which the pre-need company undertakes to deliver either to the planholder or TO his beneficiary

at the time of actual need or agreed maturity date, as specified in the pre-need plan. (e) BSP - Bangko Sentral ng Pilipinas (f) Cancelled plan - a plan that can no longer be reinstated by reason of delinquency in the payment of installments for more than two (2) years or a longer period as provided in the contract, counted from the expiry of the grace period provided for in the plan or contract. (g) Commission - Insurance Commission. (h) Contingent benefit plans - a plan the timing of the provision of the benefits of which is conditional on the occurrence of the contingency. (i) Contract price - the stipulated price in the pre-need plan. (j) Fixed value plans - pre-need plans whose benefits and costs are fixed and predetermined at the inception or purchase of the plan. (k) General agent a corporation or entity engaged in the sales of, or offering to sell, or advising prospective planholders for the purpose of selling pre-need plans in behalf of the pre-need company and/or performing other acts and things in its behalf in the conduct of its business as specified in the general agency agreement executed by and between them. (l) In-force plan - a plan for which the pre-need company has an outstanding obligation for the delivery of benefits or services or payment of termination value. (m) Lapsed plan - a plan that is delinquent in payment of installments provided for in the contract, the delinquency of which extends beyond the grace period provided for in the plan or contract. (n) Liquidity reserve - a portion of the trust fund set aside by the trustee to cover benefits due to planholders for the ensuing year. (o) Planholder - any natural or juridical person who purchases preneed plans from a pre-need company for whom or for whose beneficiaries benefits are to be delivered, as stipulated and guaranteed by the pre-need company. The term includes the assignee, transferee and any successor-in-interest of the planholder. (p) Pre-need Code Republic Act No. 9829, otherwise known as the pre-need code of the Philippines. (q) Pre-need company - any corporation registered with the Commission and authorized/licensed to sell or offer to sell pre-need plans. The term pre-need company 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. (r) Pre-need plans - contracts, agreements, deeds or plans for the benefit of the planholders which provide for the performance of future service/s, payment of monetary considerations or delivery of other benefits at the time of actual need or agreed maturity date, as

specified therein, in exchange for cash or installment amounts with or without interest or insurance coverage and includes life, pension, education, interment and other plans, instruments, contracts or deeds as may in the future be determined by the Commission. (s) Pre-need reserve liabilities - the measure of the liabilities of the pre-need company for its in-force plans or lapsed plans as of valuation date. (t) Professional refers to the companys external auditor or financial expert, actuary or other qualified professional to be accredited by the Commission to conduct valuation of reserves and other contractual liabilities related to the pre-need plans issued. (u) Related interests individuals related to each other within the fourth degree of consanguinity or affinity, legitimate or common law, and two (2) or more corporations owned or controlled by a single individual or by the same family group or the same group of persons. (v) Risk-based capital - a measure of the minimum amount of capital that a pre-need company needs to support its overall business operation. It is used to set capital requirements, considering the size and degree of risk taken by the pre-need company. (w) Rules - the Implementing Rules and Regulations of the Pre-need Code. (x) Sales counselors - natural persons who are engaged in the sale of, or offer to sell, or counsel of prospective planholders for the purpose of selling, whether or not on commission basis, pre-need plans upon the authority of the pre-need company. (y) Scheduled benefit plans - plans the date of availment of the benefits of which is set at the inception or purchase of the plan. (z) SEC - Securities and Exchange Commission (aa) Subsidiary a corporation more than fifty percent (50%) of the voting stock of which is owned and controlled directly or indirectly through one (1) or more intermediaries by a pre-need company. (bb) Trustee the trust department of a bank, a trust company/entity, an investment house or financial institution authorized to perform trust functions in the Philippines which has an existing trust agreement with a pre-need company. (cc) Trust fund - a fund set up from the planholders payments to pay for the cost of benefits and services, termination values payable to planholders and other costs necessary to ensure the delivery of benefits or services to planholders as provided for in the contracts. The terms not otherwise defined under these Rules shall be construed in their usual and commonly understood trade, business, commercial or investment meaning.
RULE 2 AUTHORITY OF THE COMMISSION

Sec. 5. Supervision.

(a) All pre-need All pre-need companies, as defined under these rules, shall be under the primary and exclusive supervision and regulation of the Insurance Commission. The Commission is hereby authorized to provide for its reorganization, to streamline its structure and operations, upgrade its human resource component to enable it to effectively and efficiently perform its functions and exercise its powers under the Pre-need Code. (b) All positions of the Commission shall be governed by compensation and position classification systems and qualification standards approved by the Commission based on a comprehensive job analysis and audit of actual duties and responsibilities. The compensation plan shall be comparable with the prevailing compensation plan in the Bangko Sentral ng Pilipinas (BSP) and other government financial institutions and shall be subject to periodic review by the Commission no more than once every two (2) years without prejudice to yearly merit reviews or increases based on productivity and efficiency. The Commission shall, therefore, be exempt from laws, rules and regulations on compensation, position classification and qualification standards. The Commission shall, however, endeavor to make its system conform as closely as possible with the principles under the Compensation and Position Classification Act of 1989 (Republic Act No. 6758, as amended). (c) The salary and allowances or personal services expense of the employees of the Insurance Commission shall be sourced from the retained amount of the fees, charges and other income derived from the regulation of pre-need companies and from the Insurance Fund under Sec. 418 of the Insurance Code of the Philippines (P.D. No. 612 as amended) and Sec. 286 of the National Internal Revenue Code. If the personal services expense cannot be covered by the retained amount and the Insurance Fund, it shall be appropriated in the General Appropriation Fund. (d) A special pre-need fund is hereby created for all amounts received as fees, charges and other income in the regulation of preneed companies. (e) In case of the upgrading of the qualification standards of the existing positions in the commission, the employees and officers presently holding such positions shall not be affected thereby and are deemed qualified to continue the exercise of the duties and responsibilities therein and to receive salaries and benefits attendant to the positions as a result of the implementation of the new reorganization and compensation plan. Sec. 6. Powers and Functions of the Commission. The Commission shall, among others, have the following powers and functions: (a) Approve, amend, renew or deny any license, registration or certificate issued under the Pre-need Code and these rules; (b) Fix and assess fees and/or charges as it may find reasonable in the exercise of regulation; (c) Regulate, supervise and monitor the operations and management of pre-need companies to ensure compliance with the Pre-need Code, these rules, existing laws, rules, regulations and circulars, with the power to:

i. Revoke or nullify, after due notice and hearing, investments made and/or entered into by a pre-need company or a trustee which are contrary to existing laws, rules and regulations; ii. Demand in the event of non-compliance by the trustee with the investment and liquidity requirements under these Rules and after due notice and hearing for the conversion of the investments made by the trustee to cash or other liquid assets to protect the interest of the planholders; and iii. Regulate, investigate or supervise activities of pre-need companies, their officers, employees, sales counselors, consultants or agents; (d) After due notice and hearing issue cease and desist orders to prevent fraud and injury to the investing public; (e) Issue subpoena duces tecum and ad testificandum, order the examination, search and seizure of documents, papers, files, tax returns, books of accounts and other records, in whatever form, of any entity or person under investigation; (f) Punish for contempt of the Commission, both direct and indirect, in accordance with the pertinent provisions of, and the penalties prescribed by, the Rules of Court; (g) After due notice and hearing impose sanctions, institute cases and/or prosecute offenders for violation of the Pre-need Code, related laws, rules, regulations, orders and circulars issued pursuant thereto; (h) After due notice and hearing, suspend or revoke licenses; (i) Enlist the aid and support of and/or deputize any and all enforcement agencies of the government in the implementation of its powers and in the exercise of its functions under the Pre-need Code; (j) After due notice and hearing, take over pre-need companies which fail to comply with the Pre-need Code, related laws, rules, regulations, orders and circulars issued pursuant thereto, through the appointment of a conservator or receiver, or liquidator; (k) Prepare, approve, amend or repeal rules, regulations, orders and circulars and issue opinions and provide guidance on, and supervise compliance with, such rules, regulations, orders and circulars; (l) Formulate policies and recommendations on issues concerning the pre-need industry, including proposed legislations; (m) Retain and utilize, in addition to its annual budget, an amount up to One hundred million pesos (P100,000,000.00) of the fees, charges and other income derived from the regulation of the preneed companies; and (n) Exercise such other powers as may be provided by law as well as those which may be implied from, or which are necessary or incidental to carry out the express powers granted the Commission to achieve the objectives and purposes of the law.

RULE 3 ORGANIZATION, LICENSING AND MANAGEMENT OF PRE-NEED COMPANIES

Section 7. Prerequisites to Incorporation. (a) The Securities and Exchange Commission (SEC) shall not accept or approve the articles of incorporation and by-laws of any pre-need company without a favorable recommendation from the commission. no pre-need company shall be recommended for registration unless its paid-up capital complies with the minimum paid-up capital required by the pre-need code and the rules promulgated by the commission. the name of the company shall contain words such as Plans, Pre-need Company, Pre-need Corporation or words that show that the company shall engage in pre-need business. (b) A foreign corporation may be allowed to engage in a pre-need business in the Philippines: Provided, That it shall comply with the pertinent laws, rules and regulations. Section 8. Amendment of the Articles of Incorporation and By-laws. Amendments to the articles of incorporation and by-laws of a pre-need company, including merger, consolidation and dissolution, shall not be approved by the SEC without the favorable recommendation from the Commission. Section 9. Paid-up Capital. (a) A pre-need company incorporated after the effectivity of the Preneed Code shall have a minimum paid-up capital of One hundred million pesos (P100,000,000.00). Existing pre-need companies shall comply with the following minimum unimpaired paid-up capital: i. One hundred million pesos (P100,000,000.00) for companies selling at least three (3) types of plan; ii. Seventy-five million pesos (P75,000,000.00) for companies selling two (2) types of plan; and iii. Fifty million pesos (P50,000,000.00) for companies selling a single type of plan. (b) 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). (c) The Commission may adopt risk-based principles on capital adequacy based on internationally accepted standards. In the exercise of its authority under this paragraph, the Commission may prescribe a higher minimum unimpaired paid-up capital for pre-need companies. Section 10. Licensing of Pre-Need Companies. (a) 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 Code and these rules.

(b) The pre-need company may be licensed and authorized to issue plans falling under any or all of the following plan types: i. Educational plan; ii. Pension plan; and iii. Life or Memorial plan. (c) The license under this Section shall expire one (1) year from the time of the registration. It may be renewed provided that based on its latest audited financial statements, trust fund annual statements and reserves valuation reports, the pre-need company: i. has no solvency and trust fund deficiencies; ii. has no paid-up capital impairment; and iii. is continuing to comply with the provisions of the pre-need code, and the circulars, instructions, rules and regulations of the commission. Such renewal shall be deemed approved if not acted upon within thirty (30) days from the time of filing of the application for renewal. (d) The following are the minimum documentary requirements for new applicant pre-need company: i. latest articles of incorporation and by-laws; ii. latest financial statements; iii. bio-data of its officers and board of directors; iv. copy of manual of corporate governance; v. organizational chart of the corporation; and vi. general information sheet showing the latest incorporators, their citizenship and percentage of shares owned and paid Section 11. Qualification and Disqualification of Directors and Officers. (a) To maintain the quality of management of pre-need companies and afford better protection to planholders and beneficiaries, the Commission shall prescribe, pass upon and review the qualifications and disqualifications of individuals elected or appointed directors or officers of pre-need companies, including its actuaries, and disqualify those found unfit. The Commission may, after due notice and hearing, disqualify, suspend or remove any director or officer who commits or omits an act which renders him unfit for the position. (b) In determining whether an individual is fit and proper to hold the position of a director or officer of a pre-need company, regard shall be given to his integrity, experience, education, training and competence. The following persons, and those determined by the Commission to be unfit, shall in no case be allowed to serve or act in the capacity of an officer, employee, director, consultant or sales counselor of any pre-need company:

i. Any person convicted of any crime involving any pre-need plan, security or financial product; ii. Any person convicted of an offense involving moral turpitude or involving fraud or embezzlement, theft, estafa or other fraudulent acts or transactions; iii. Any person who, by reason of any misconduct, is enjoined by order, judgment or decree by any court, quasi-judicial body or administrative agency of competent jurisdiction from acting as a director, officer, employee, consultant, agent or occupying any fiduciary position; iv. Any person found by the Commission to have willfully violated or willfully aided, abetted, counseled, commanded, induced or procured the violation of the Pre-need Code, the Insurance Code, the Securities Regulation Code or any related laws and any rules or orders thereunder; v. Any person judicially declared to be insolvent or incapacitated to contract; and vi. Any person found guilty by a foreign court, regulatory authority or government agency of the acts or violations similar to any of the acts or misconduct enumerated in the foregoing paragraphs: Provided, That conviction in the first instance shall be considered as sufficient ground for disqualification. Section 12. Independent Directors. Pre-need companies shall have at least two (2) independent directors or twenty percent (20%) of the members of the board, whichever is higher. For this purpose, an independent director shall refer to a person other than an officer, employee or any person having a fiduciary relation to the pre-need company, its parent or subsidiaries, or any other individual having a relationship therewith, which may interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Section 13. Investment Restrictions of Directors and Officers. (a) No director or officer of any pre-need company shall, after his election or appointment as such, directly or indirectly, for himself or as the representative or agent of others, have an investment in excess of Five million pesos (P5,000,000.00) in any corporation or business undertaking in which the pre-need companys trust fund has an investment in or has a financial interest with. (b) No relatives of directors or officers of the pre-need company within the fourth degree of consanguinity or affinity shall, directly or indirectly, have an investment of more than Five million pesos (P5,000,000.00) in any corporation or business undertaking in which the pre-need companys trust fund has an investment in or has a financial interest with during the incumbency or term of the director or officer involved.
RULE 4 REGISTRATION OF PLANS

Section 14. Registration of Pre-Need Contracts/Plans.

(a) Within a period of forty-five (45) days after the grant of a license to do business as a pre-need company, and for every pre-need plan which the pre-need company intends to offer for sale to the public, the pre-need company shall, among other things, file with the Commission the following: (1) Duly accomplished Registration Statements; (2) Board resolution authorizing the registration of applicant's pre-need plans; (3) Opinion of independent counsel on the legality of the issue; and (4) Supporting documents: i. Latest articles of incorporation and by-laws of the issuer; ii. Trust agreement with the trustee; iii. Copies of sales materials which the issuer intends to distribute to the public; iv. Copies of related contracts such as mortuary contracts, school contracts or other service providers contracts; v. List of schools for traditional education plans, including current costs of promised benefits; vi. Copies of agency contracts with general agents and sales counselors; vii. Curriculum vitae of officers and directors; viii. Photographs of the signatories to the registration statement taken not more than 30 days prior to the filing of registration statements; ix. NBI clearance of the directors and principal officers of the issuer or current passport; x. Description of training program for agents and sales counselors; xi. Pre-need plan contract/ agreement; xii. Pre-need plan application form; xiii. Specimen copies of group master policy for group credit life and group yearly renewable term including copies of insurance riders for supplementary insurance benefits; xiv. Sample copies of individual insurance certificates; xv. Detailed price schedule showing minimum and maximum pricing for the notice and order; and

xvi. The written consent of the expert to be named as such and who has certified any part of the registration statement or any documents included therein shall be secured and attached to the registration statement; (5) Audited financial statements accompanied by an audit report of the certifying auditors as of a date not more than ninety (90) days prior to the date of filing of the registration statement, with the balance sheet showing all the assets of the issuer, the nature and cost thereof whenever determinable, with intangible items segregated, including any loan to, or from any officer, director, stockholder or person directly or indirectly controlling or controlled by the issuer, or person under direct or indirect common control with the issuer, and all the liabilities and surplus of the issuer showing how and from what sources such surplus was created. If the above cannot be complied with, an unaudited financial statements as of a date not more than ninety (90) days prior to the date of filing of the registration statement, certified under oath by the principal officer of the company, or person performing similar functions, may be submitted. And in addition, the latest audited financial statements accompanied by an audit report; (6) Actuarial feasibility study with actuarial certification of the actuary accredited by the commission for the pre-need company containing the following: i) A viability model which includes, but is not limited to, the following: a. interest rate assumptions; b. withdrawal assumptions: lapses and surrenders; c. schedule of trust fund deposits and projections; d. amount and costs of plan benefits including the contingent benefit availment rates assumed for mortuary-type benefits; e. expenses and loadings including, but not limited to, all required fees and taxes, commissions, overrides, bonuses, premiums on insured benefits, and all other charges; f. schedule of termination values together with the bases thereof; g. schedule of projected reserve liability values together with the basis/assumptions and formulations thereof; and h. pricing schedule including how the gross pre-need price was generated with actuarial formulations; ii) A statement certifying that the actuarial formulations used in the viability model are in accordance with sound actuarial principles and practices, existing laws, and pertinent rules and regulations of the commission;

iii) A statement of opinion that the actuarial assumptions used in the viability model are reasonable and appropriate for the plan; iv) A statement certifying that the plan price/s, scheduled trust fund contributions, projected reserve liabilities, and termination values are in accordance with generally accepted actuarial principles; v) A statement certifying that the actuary has reviewed the provisions of the plan contract relative to its benefits and guarantees which have been quantified and considered in the pricing, reserve valuation, trust fund contribution, and termination values; vi) A statement of opinion that all insurance benefits included in the plan agreement are covered under insurance contract(s) with a duly licensed insurance carrier; and vii) Actuarial notes on the plan description, formulations and assumptions used in the viability model for the complete duration of the plan. (b) The registration statement shall be signed by the issuers chief executive officer or chief operating officer or chief finance officer or a corporate officer performing similar functions. (c) The registration statement shall be properly completed all items shall be answered; provided that items which are not applicable shall be filled up with N.A.. if the issuer is selling two (2) or more types of pre-need plans, the amount and number for each type of plan to be registered shall be specified. (d) Where applicable, all answers shall be consistent with those stated in the actuarial study submitted under paragraph 7 of this rule. (e) The registration statements and sales materials required under this rule shall contain the appropriate risk factors as may be determined by the commission. (f) Upon filing of the registration statement, the issuer shall pay the filing fee as prescribed by the commission, and the act of such filing shall be immediately published by the commission at the expense of the issuer, in two (2) newspapers of general circulation in the Philippines, once a week for two (2) consecutive weeks, reciting that a registration statement for the sale of such plans has been filed, and that the registration statement, as well as the papers attached thereto, are open for inspection during business hours. (g) If, at any time, the information contained in the registration statement is or has become materially misleading, incorrect, inadequate or incomplete or the sale or offering for sale of the preneed plans covered thereby tends to defraud or prejudice the investing public, the issuer shall immediately file an amendment to the registration statement. Section 15. Denial of registration.

The commission shall deny the registration of pre-need plan/s of a preneed company if on the basis of its latest audited financial statements, trust fund annual statements and reserves valuation report, it has solvency or trust fund deficiencies, or paid-up capital impairment. Section 16. Suspension of permit to sell of pre-need plans. (a) If, at any time the information contained in the registration statement filed is or has become materially misleading, incorrect, inadequate or incomplete or the sale or offering for sale of the preneed plans covered thereby may work or tend to work a fraud or prejudice the investing public, the commission may require the issuer such further information necessary or conduct an investigation to ascertain whether the registration or permit to sell such pre-need plan should be cancelled on any of the grounds set forth in section 17. (b) The commission may suspend the permit to sell such pre-need plan pending further investigation, by entering an order specifying the grounds for such action and by notifying by mail, personally or, by telephone and confirmed in writing, or by telegraph, the issuer and every general agent who shall have notified the commission of an intention to sell such pre-need plan. (c) Refusal to furnish information required by the commission within the time fixed by the Commission, may be a proper ground for the entry of such order of suspension. (d) The order, although binding on the person notified thereof, shall be deemed confidential and shall not be published. upon the entry of such order of suspension, no further sales of such pre-need plan shall be made until the commission orders otherwise. (e) In the event of the entry of an order of suspension, the commission shall give a prompt hearing to the parties involved. If upon such hearing, the commission shall determine that the permit to sell of any such pre-need plan should be cancelled on any ground specified herein, it shall enter a final order cancelling the registration and the permit to sell and prohibiting the sale of such pre-need plan. If, however, upon such hearing the commission finds that the sale of the plans will neither be fraudulent nor result in fraud, it shall forthwith enter an order lifting the order of suspension, and the pre-need plan shall be restored to its status as a registered pre-need plan contract under the code, as of the date of such order of suspension. (f) Travel bans may be recommended to be issued by the appropriate authority on all the officers and directors of the issuer, upon issuance of a cease and desist order or order of suspension. Section 17. Mandatory cancellation of registration. (a) The commission shall cancel the registration of any pre-need plan and the permit to sell such pre-need plan by issuing an order to this effect, setting forth its findings in respect thereto, if, after due notice and hearing, it shall appear that the issuer: i. Is insolvent;

ii. Has violated any of the provisions of the code, or the rules promulgated pursuant thereto, or any order of the commission of which the issuer has notice; iii. Has been or is engaged or is about to engage in fraudulent transactions; iv. Is in any other way dishonest or has made any fraudulent representation in any circular or other literature that has been distributed concerning the issuer or its pre-need plans; and v. Does not conduct its business in accordance with law. (b) The Commission shall compel the production of all the books and records of the issuer, administer oaths to, and examine the officers of such issuer or any other person connected therewith as to its business or affairs, and may require a balance sheet exhibiting the assets and liabilities of such issuer and/or its income or profit statement, certified to by an independent certified public accountant. (c) If the issuer shall refuse to permit an examination to be made by the commission, its refusal shall give ground for the cancellation of registration. (d) Notice of issuance of an order of cancellation shall be given by mail, personally, by telephone confirmed in writing, or by telegraph, to the issuer and every dealer and broker who shall have notified the commission of an intention to sell such pre-need plan. (e) The power of the commission to cancel the registration and/or the permit to sell is without prejudice to its power under the Prenee Code to enforce compliance therewith. Section 18. Voluntary cancellation of registration or suspension of permit to sell. (a) A registration of a pre-need plan may be cancelled or a permit to sell may be suspended or cancelled by the commission upon petition for its suspension and/or cancellation, as the case may be, by the issuer as herein provided. (b) A petition for the cancellation of registration of a pre-need plan or a petition for suspension and/ or cancellation of a permit to sell shall be accompanied by the following: i. Petition for the cancellation of the registration or petition for suspension and/or cancellation for the permit to sell stating the reasons therefor; ii. Proof of the reasons for cancellation of registration or suspension and/or cancellation of the permit to sell; iii. Proof of publication of a notice to stockholders/investors/planholders of said petition for cancellation of registration and/or petition for suspension and/or cancellation of a permit to sell; iv. Board resolution certified under oath by the corporate secretary of the issuer and attested to by the president or one

performing similar functions approving such petition for cancellation and/or suspension as the case may be; v. List of all planholders; vi. A certification under oath by the treasurer of the issuer attested to by the President that the planholders claims have been settled in accordance with the Pre-need plan contract; and vii. A joint and several assumption of liability executed by the treasurer and the president of the issuer for claims that may arise as a result of said cancellation/suspension; and viii. Evidence of sufficiency of the trust fund to cover payment of outstanding liabilities to planholders. (c) After filing of the petition and supporting documents and payment of the filing fee, the petition shall be immediately published by the issuer in two (2) newspapers of general circulation, once a week for two (2) consecutive weeks reciting the contents of the petition and notifying planholders to file their claims with the issuer. (d) If after the completion of the aforesaid publication, the commission finds that the petition together with all the other papers and documents attached thereto is on its face complete and that no party stands to suffer damage thereby, it shall issue an order cancelling said registration or cancelling and/or suspending the permit to sell. however, such order shall not preclude any planholder from his available remedies under the law should the cancellation and/or suspension cause him damage. Section 19. Approval of Contract Forms. All forms, including amendments thereto, relating to the pre-need plans shall be approved by the Commission. No pre-need contracts or certificates shall be issued or delivered within the Philippines unless in the form previously approved by the Commission. Section 20. Pre-need Advertising Rules. (a) Pre-need plans shall be advertised and sold in an appropriate non-misleading manner. (b) It shall be unlawful for any pre-need company to advertise itself or its pre-need plans unless the Commission has approved such advertising material. The Commission shall have a period of ten (10) working days to approve or deny the advertising material and failure to act within the said period shall cause the advertising material to be deemed approved. For purposes hereof, the Commission shall have the power to define the scope of its advertising rules to appropriately cover advertising or other communications to the public. (c) Any person who sells or offers to sell any pre-need plan or contract by any means or instruments of communication in violation of this section shall be liable to the person purchasing such pre-need contract who may sue to recover the consideration paid for such pre-need contract with interest thereon. In addition

hereto, the Commission shall have the power to pursue the erring pre-need company in an administrative or criminal proceeding. (d) A fine of One hundred thousand pesos (P100,000.00) shall be imposed on any pre-need company found to have violated this Section: Provided, That a second violation of this Section shall, in addition to the fine imposed, result in the suspension of the license of the pre-need company. Section 21. Disclosures to Prospective Planholders. (a) No registered pre-need plan shall be sold to prospective planholders unless an information brochure, which has been filed with the Commission, has been provided to the purchaser. (b) The information brochure shall contain an explanation of the principal features of the pre-need plan, a statement that the planholder may avail of a default or reinstatement period within which to reinstate his lapsed plan, and the conditions of the same and the rates of return for scheduled benefit plans and illustrative yields for contingent benefit plans, and such other information that the Commission shall require by rule.
RULE 5 LICENSING OF SALES COUNSELORS AND GENERAL AGENTS

Section 22. Licensing of Sales Counselors. (a) No sales counselor shall be allowed to solicit, sell or offer to sell pre-need plans under these rules without being licensed as such by the Commission. (b) The following are the qualifications of applicant for license as sales counselor: i. The applicant must be of good moral character and must not have been convicted of any crime involving moral turpitude; ii. The applicant has undergone a training program approved by the Commission and such fact has been certified under oath by a duly authorized representative of a pre-need company; and iii. The applicant has passed a written examination administered by the Commission: Provided, That the administration of the examination may be delegated to an independent organization under the supervision of the Commission. The license shall automatically expire every thirtieth (30th) day of June or such date of every year as may be fixed by the Commission and may be accordingly renewed. Section. 23. Denial, Suspension, Revocation of License. Subject to due notice and hearing, an application for the issuance or renewal of a license to act as sales counselor may be denied, or such license, if already issued, shall be suspended or revoked based on the following grounds :

(a) materially misrepresented statements in the application requirements; (b) obtained or attempted to obtain a license by fraud or misrepresentation; (c) materially misrepresented the terms and conditions of pre-need plan which he sold or offered to sell; (d) solicited, sold or attempted to solicit or sell a pre-need plan by means of false or misleading representation and other fraudulent means; (e) terminated for cause from another pre-need company; (f) similar grounds found in Section 11 of these rules; (g) willfully allowing the use of ones license by a non-licensed or barred individual; and (h) analogous circumstances. Section. 24. Licensing of General Agents. (a) If the issuer should contract the services of a general agent to undertake the sales of its plans, such general agent shall be required to be licensed as such with the Commission, in accordance with the requirements imposed by the Commission. (b) The following are the minimum requirements for the licensing of general agents: i. Copy of certificate of registration; ii. Copy of articles of incorporation/ partnership/ cooperation and by-laws; iii. Minimum paid-up capital of one million pesos; iv. Application form; v. Endorsement of the applicant by the principal pre-need company; and vi. Copy of the general agency agreement; (c) The general agent must be a registered corporation or partnership in the Philippines. agents soliciting or selling pre-need plans in behalf of the general agent must possess the same qualifications as the sales counselors; (d) The application of a general agent shall not be approved unless a salesman is qualified and licensed by the commission. the general agent shall cease solicitation and selling of pre-need plans when no natural person holds a valid license representing the general agent; (e) The general agent must be authorized in the general agency agreement or by a written power of attorney to receive notices, summons and legal processes for and in behalf of the pre-need company concerned in connection with actions or legal proceedings against said pre-need company; and

(f) A license issued to a general agent shall authorize only the individual or individuals named in the license. exercise or attempted exercise of such authority by an individual not so named in the license, with the knowledge or consent of the licensee shall constitute cause for the revocation, suspension or non-renewal of the license.
RULE 6 DEFAULT AND TERMINATION BY PLANHOLDERS

Section 25. Default; Reinstatement Period. (a) The pre-need company must provide in all contracts issued to planholders a grace period of at least sixty (60) days within which to pay accrued installments, counted from the due date of the first unpaid installment. (b) Nonpayment of a plan within the grace period shall render the plan a lapsed plan. Any payment by the planholder after the grace period shall be reimbursed forthwith, unless the planholder duly reinstates the plan. The planholder shall be allowed a period of not less than two (2) years from the lapse of the grace period or a longer period as provided in the contract within which to reinstate his plan. No cancellation of plans shall be made by the issuer during such period when reinstatement may be effected. (c) Within thirty (30) days from the expiration of the grace period and thirty (30) days prior to the expiration of the reinstatement period, which is two (2) years from the lapse of the grace period, the pre-need company shall give written notice to the planholder that his plan will be cancelled if not reinstated within two (2) years from the lapse of the grace period or a longer period as provided in the contract. Failure to give either of the required notices shall preclude the pre-need company from treating the plans as cancelled. Section 26. Termination of Pre-Need Plans. (a) A planholder may terminate his pre-need plan at any time by giving written notice to the issuer. (b) A pre-need plan shall contain a schedule of termination values to which the planholder is entitled to upon termination. Such schedule of termination value shall be required for all in-force pre-need plans and shall be fair, equitable and in compliance with the Commission issuances. The termination value of the pre-need plan shall be predetermined by the actuary of the pre-need company upon application for registration of the pre-need plans with the Commission and shall be disclosed in the contract. (c) Any offer by the pre-need company to terminate the pre-need plan for consideration exceeding the termination value provided in the plan contract shall not require the prior approval of the Commission, provided that (i) the consideration shall be below the pre-need reserves for the specific plan, (ii) the offer is accepted by the pre-need planholders, and (iii) the offer shall not prejudice the claim of planholders who do not avail of such offer.
RULE 7 CLAIMS SETTLEMENT

Section 27. Unfair Claims Settlement Practices.

(a) No pre-need company shall refuse, without just cause, to pay or settle claims arising under coverages provided by its plans nor shall any such company engage in unfair claim settlement practices. Any of the following acts by a pre-need company, if committed without just cause, shall constitute unfair claims settlement practices: i. Knowingly misrepresenting to claimants pertinent facts or plan provisions relating to coverages at issue; ii. Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its plan; iii. Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under its plan; iv. Failing to provide prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear; or v. Compelling planholders to institute suits or recover amounts due under its plan by offering, without justifiable reason, substantially less than the amounts ultimately recovered in suits brought by them. (b) Evidence as to the number and types of valid and justifiable complaints to the Commission against a pre-need company shall be deemed admissible in an administrative or judicial proceeding brought under this section. (c) Any violation of this section shall be considered sufficient cause for the suspension or revocation of the companys certificate of authority. Section 28. Payment of Plan Proceeds. (a) In the case of scheduled benefit plans, the proceeds of the plan shall be paid immediately upon maturity of the contract, unless such proceeds are made payable in installments or as an annuity, in which case the installments or annuities shall be paid as they become due. Refusal or failure to pay the claim within fifteen (15) days from maturity or due date will entitle the beneficiary to collect interest on the proceeds of the plan for the duration of the delay at the rate twice the legal interest unless such failure or refusal to pay is based on the ground that the claim is fraudulent: Provided, That the planholder has duly complied with the documentary requirements of the pre-need company. (b) In the case of contingent benefit plans, the benefits shall be paid by the pre-need company thirty (30) days upon submission of all necessary documents. Section 29. Recovery of Investment. Subject to applicable laws on the extent of liability of directors, officers and stockholders of a corporation and in accordance with the rules on insolvency, the planholder may institute the necessary legal action in court to recover his/her investment in the pre-need company, in case of its insolvency or bankruptcy. However, in case the insolvency or bankruptcy is a mere cover-up for fraud or illegality, the planholder may

institute the legal action directly against the officers and/or controlling owners of the said pre-need company. Section 30. Consequences of Delay or Default In case of any litigation for the enforcement of any pre-need plan, it shall be the duty of the Commission to determine whether the payment of the claim of the planholder has been unreasonably denied or withheld. If found to have unreasonably denied or withheld the claim, the pre-need company shall be liable to pay damages, consisting of actual damages, attorneys fees and legal interest, to be computed from the date the claim is made until it is fully satisfied: Provided, That the failure to pay any such claim within the time prescribed in Section 26 shall be considered prima facie evidence of unreasonable delay in payment. Section 31. Distribution of Profits. A pre-need company may declare dividend provided that the following shall remain unimpaired, as certified under oath by the president and the treasurer with respect to items (a) and (b); and in the case of item (c), by the trust officer. (a) One hundred percent (100%) of the capital stock; (b) An amount sufficient to pay all net losses reported, or in the course of settlement, and all liabilities for expenses and taxes; and (c) Trust fund. Any dividend declared under the preceding paragraph shall be reported to the Commission within thirty (30) days after such declaration.
RULE 8 TRUST FUND

Section 32. Trust Fund. (a) To ensure the delivery of the guaranteed benefits and services provided under a pre-need plan contract, a trust fund per pre-need plan category (i.e., life plan, education plan or pension plan) shall be established. A portion of the installment payment collected shall be deposited by the pre-need company in the trust fund, the amount of which will be as determined by the actuary based on the viability study of the pre-need plan approved by the Commission. (b) Assets in the trust fund shall at all times remain for the sole benefit of the planholders. At no time shall any part of the trust fund be used for or diverted to any purpose other than for the exclusive benefit of the planholders. In no case shall the trust fund assets be used to satisfy claims of other creditors of the pre-need company. The provision of any law to the contrary notwithstanding, in case of insolvency of the pre-need company, the general creditors shall not be entitled to the trust fund. (c) Except for the payment of the cost of benefits or services, the termination values payable to the planholders, the insurance premium payments for insurance-funded benefits of memorial life plans and other costs necessary to ensure the delivery of benefits or services to planholders, no withdrawal shall be made from the trust fund unless approved by the Commission.

(d) The benefits received by the planholders shall be exempt from all taxes and the trust fund shall not be held liable for attachment, garnishment, levy or seizure by or under any legal or equitable processes except to pay for the debt of the planholder to the benefit plan or that arising from criminal liability imposed in a criminal action. (e) The trust fund shall at all times be sufficient to cover the required pre-need reserve. Section 33. Deposits to the Trust Fund. (a) The pre-need company shall make monthly deposits to the trust fund in an amount determined by the accredited actuary, sufficient to pay the benefits promised under the contract. For plans paid for in full, the pre-need company shall deposit into the trust fund at least forty-five percent (45%) for life plans and fifty-one percent (51%) for education and pension plans of said full payment or such higher amount as determined by the actuary. (b) In case of installment payments, the minimum limits of the deposit contributions to the trust fund, unless the viability study done by the actuary requires otherwise, shall be in accordance with the following schedule:

Life Plans Collection of the 1st 20% of Contract Price Collection of the 2nd 20% of Contract Price Collection of the 3rd 20% of Contract Price Collection of the 4th 20% of Contract Price Collection of the 5th 20% of Contract Price 5% 10% 70% 70% 70%

Other Plans 5% 10% 80% 80% 80%

(c) Contributions to the trust fund shall not form part of the income or gross receipts of the pre-need company and, therefore, shall not be available for dividend declaration or payment to creditors. (d) The deposits to the trust fund shall be made within twenty (20) days from the end of each reference month for payments received from plans whether paid for in full or in installments. Failure to make the trust fund deposit shall subject the pre-need company to administrative liability as provided for under the Pre-need Code and these rules. (e) To determine the adequacy of the trust funds in the interim, the pre-need company shall submit to the Commission valuation report on reserves and contractual liabilities as of June 30 and December 31 of each year not later than 30 days after the end of the reporting period. (f) For plans sold prior to the effectivity of this law, the minimum contributions to the trust fund shall be governed by rules and

regulations in force at the time of sale, subject to the overriding principle that the planholders rights must be protected. Section 34. Terms and Conditions of a Trust Fund. (a) A trust fund must be established separately for each type of preneed plan with the trust department of a trust company, bank or investment house doing business in the Philippines. No trust fund shall be established by a pre-need company with an affiliate trust entity subject to Section 38 hereof. (b) The trust agreement shall be submitted to the Commission for approval before execution and shall contain the following salient provisions, among others: i. The manner in which the trust fund is to be operated; ii. Investment powers of the trustee with respect to trust deposits, including the character and kind of investment; iii. Auditing and settlement of accounts of the trustee with respect to the trust fund; iv. Basis upon which the trust fund may be terminated; v. Provisions for withdrawals from the trust fund; vi. That the trustee shall submit to the power of the Commission to examine and verify the trust fund; vii. An undertaking by the trustee that it shall abide by the rules and regulations of the Commission with respect to the trust fund; and viii. An undertaking by the trustee that it shall submit such other data or information as may be prescribed by the Commission. Section 35. Responsibilities of the Trustee. The trustee shall: (a) Administer and manage the trust fund with utmost good faith, care and prudence required by a fiduciary relationship. (b) The trustee shall have the exclusive management and control over the funds and the right at any time to sell, convert, invest, change, transfer or otherwise change or dispose of the assets comprising the funds within the parameters prescribed by the preneed company and provided these parameters are compliant with the Commissions regulations. (c) Not use the trust fund to invest in or extend any loan or credit accommodation to the pre-need company, its directors, officers, stockholders, and related interests as well as to persons or enterprises controlling, owned or controlled by, or under common control with said company, its directors, officers, stockholders and related interests except for entities which are direct providers of pre-need companies. Section 36. Investment of the Trust Fund.

To ensure the liquidity of the trust fund to guarantee the delivery of the benefits provided for under the plan contract and likewise obtain sufficient capital growth to meet the growing actuarial reserve liabilities, all investments of the trust fund/s of a pre-need company shall be limited to the following and subject to limitations to wit: (a) Fixed income instruments. These may be classified into short term and long term instruments. The instrument is short term if the maturity period is three hundred sixty five (365) days or less. This category includes: i. Government securities which shall not be less than ten percent (10%) of the trust fund amount; ii. Savings/time deposits and unit investment trust funds maintained with and managed by a duly authorized bank with satisfactory examination rating as of the last examination by the Bangko Sentral ng Pilipinas; iii. Commercial papers duly registered with the SEC with a credit rating of 1 for short term and AAA for long term based on the rating scale of an accredited Philippine Rating Agency or its equivalent at the time of investment. The maximum exposure to long-term commercial papers shall not exceed fifteen percent (15%) of the total trust fund amount while the exposure to each commercial paper issuer shall not exceed ten percent (10%) of the allocated amount; and iv. Direct loans to corporations which are financially stable, profitable for the last three (3) years and have a good track record of paying their previous loans. These loans shall be fully secured by a real estate mortgage up to the extent of sixty percent (60%) of the zonal valuation of the property at the time the loan was granted. The property shall be covered by a transfer certificate of title registered in the name of the mortgagor and free from liens and encumbrances. The maximum amount to be allocated for direct loans shall not exceed five percent (5%) of the total trust fund amount while the amount to be granted to each corporate borrower shall not exceed ten percent (10%) of the amount allocated. The maximum term of the loan should be no longer than four (4) years. Direct loans to planholders are exempt from the limitations set forth under this Section: Provided, That such loans to planholders shall not exceed ten percent (10%) of the total trust fund amount. (b) Equities. Investments in equities shall be limited to stocks listed on the main board of a local stock exchange. Investments in duly registered collective investment instruments such as mutual funds are allowed hereunder: Provided, That such funds are invested only in fixed income instruments and blue chips securities, subject to the limitations prescribed by laws, rules and regulations.

These investments shall include stocks issued by companies that are financially stable, actively traded, possess good track record of growth and have declared dividends for the past three (3) years. Notwithstanding the prohibition against transactions with directors, officers, stockholders and related interests, the trustee may invest in equities of companies related to the trustee provided these companies comply with the foregoing criteria provided in this paragraph for equity investments. The amount to be allocated for this purpose shall not exceed thirty percent (30%) of the total trust fund while the investment in any particular issue shall not exceed ten percent (10%) of the allocated amount. The investment shall be recorded at the aggregate of the lower of cost or market. Existing investments which are not in accordance herewith shall be disposed of within three (3) years from the effectivity of the Preneed Code. (c) Real Estate. These shall include real estate properties located in strategic areas of cities and first class municipalities. The transfer certificate of title (TCT) shall be in the name of the seller, free from liens and encumbrances and shall be transferred in the name of the trustee in trust for the planholders unless the seller/transferor is the pre-need company wherein an annotation to the TCT relative to the sale/transfer may be allowed. It shall be recorded at acquisition cost. However, the real estate shall be appraised every three (3) years by a licensed real estate appraiser, accredited by the Philippine Association of Real Estate Appraisers, to reflect the increase or decrease in the value of the property. In case the appraisal would result in an increase in the value, only sixty percent (60%) of the appraisal increase is allowed to be recorded in the books of the trust fund but in case of decline in value, the entire decline shall be recorded. Appraisal increment should not be used to cover-up the required monthly contribution to the trust fund. The total recorded value of the real estate investment shall not exceed ten percent (10%) of the total trust fund amount of the preneed company. In the event that the existing real estate investment exceeds the aforesaid limit, the same shall be leveled off to the prescribed limit within three (3) years from the effectivity of the Pre-need Code. Investment of the trust fund, which is not in accordance with the preceding paragraphs, shall not be allowed unless the prior written approval of the Commission had been secured: Provided, further, That no deposit or investment in any single entity shall exceed fifteen percent (15%) of the total value of the trust fund: Provided, finally, That the Commission is authorized to adjust the percentage allocation per category set forth herein not in excess of two percentage (2%) points upward or downward and no oftener than once every five (5) years. The first adjustment hereunder may be made no earlier than five (5) years from the effectivity of the Pre-need Code. The pre-need company shall not use the trust fund to extend any loan to or to invest in its directors, stockholders, officers or its affiliates. Section 37. Valuation of Reserve Liabilities of the Pre-Need Company. (a) To determine the sufficiency and adequacy of the fund, an annual pre-need reserve valuation report establishing the reserve

requirement and contractual liabilities of the pre-need company shall be made and submitted to the Commission, within one hundred twenty (120) days from end of the calendar year. The valuation report shall contain the assumptions, methodology, formulas used, a summary of the pre-need plans that were subject of valuation, and the results of such valuation. (b) The report shall be duly certified to by a professional or an actuary as may be determined by the Commission and duly accredited by it as defined in these rules. Upon approval by the Commission of the reserve computation, any deficiency in the fund shall be covered by the pre-need company, in the manner as may be prescribed by the Commission. (c) In case of an excess of the fund over the reserve liability, the excess shall be credited for future deposit requirements. Section 38. Trust Fund Deficiencies. (a) Upon approval by the Commission of the pre-need reserve computation submitted in the preceding section, any deficiency in the trust fund, when compared to the reserve liabilities as reported in the pre-need reserve valuation report, shall be funded by the preneed company within sixty (60) days from such approval unless otherwise allowed by the Commission under these rules. (b) Failure to cover the deficiency in an appropriate manner within the time required shall subject the pre-need company to the payment of a penalty, in addition to other remedies exercisable by the Commission, as provided in the Pre-need Code or these rules. Provided, however, that in case the deficiency is caused by or occurs at a time of serious national or global economic crisis, the Commission shall have the authority to extend regulatory leeway to the pre-need company with trust fund deficiencies such as, but not limited to, allowing a period longer than sixty (60) days within which additional deposits must be made by the pre-need company or by allowing installment payments of such deficiencies. Any regulatory leeway extended by the Commission under this provision shall be subject to conditions which it may deem necessary. (c) Any excess of the trust fund over the actuarial reserve liabilities may be credited to future deposit requirements. Section 39. Liquidity Reserve. (a) The trustee shall at all times maintain a liquidity reserve which shall be sufficient to cover at least fifteen percent (15%) of the trust fund but in no case less than one hundred twenty-five percent (125%) of the amount of the availing plans for the succeeding year. For this purpose, the pre-need company shall timely submit to the trustee a summary of benefits payable for the succeeding year. (b) The following shall qualify as investments for the liquidity reserve: i. Loans secured by a hold-out on assignment or pledge deposits maintained either with the trustee or other banks, or of deposit substitute of the trustee itself or mortgage and chattel mortgage bonds issued by the trustee;

ii. Treasury notes or bills, other government securities or bonds, and such other evidences or indebtedness or obligations the servicing and repayment of which are fully guaranteed by the Republic of the Philippines; iii. Repurchase agreements with any of those mentioned in Item b above, as underlying instruments thereof; and iv. Savings or time deposits with government-owned banks or commercial banks. Section 40. Trustees. Upon approval of the Commission or when the Commission requires for the protection of planholders, the pre-need company shall entrust the management and administration of the trust fund to any reputable banks trust department, a trust company, an investment house, financial institution or any entity authorized to perform trust functions in the Philippines: Provided, That no director and/or officer of the pre-need company shall at the same time serve as director and/or officer of the affiliate or related trust entity: Provided, further, That no trust fund shall be established by a pre-need company with a subsidiary, affiliate or related trust entity. However, such may be allowed, provided that the following conditions are complied with: (a) A written approval of the Commission has been previously obtained; and (b) Public disclosure of the affiliation with the trust entity be included in all materials in whatever form.
RULE 9 ACTUARIES FOR PRE-NEED COMPANIES

Section 41. Accreditation of Actuary. The Commission shall have the power to set standards for the accreditation of actuaries directly responsible for the preparation and certification of the viability study of the pre-need plan submitted by the pre-need company for registration or amendment with the Commission. It shall further have the power to define the obligations and liabilities of actuaries accredited by it. No actuary engaged by a pre-need company shall at the same time be a stockholder or serve as a director of the board, chief executive officer or chief financial officer of the company or any such position that the Commission may determine to have an inherent conflict of interest to the position of an actuary. Section 42. Disaccreditation of an Actuary. Upon notice and hearing an actuary shall be disaccredited by the Commission on the following grounds: (a) Failure to adequately perform his required functions and duties under these rules; (b) Failure to meet the requirements of Section 11 of these rules; (c) Failure to disclose conflict of interest;

(d) Failure to comply with the Code of Conduct of the Actuarial Society of the Philippines; or, (e) Such other grounds that may be determined by the Commission. Section 43. Required Actuarial Reports. (a) The following documents which are from time to time submitted to the Commission by a pre-need company shall be duly certified by an Insurance Commission accredited actuary: i. Actuarial valuation of all liabilities pertaining to pre-need contracts; ii. Asset share studies when applying for approval of new products or enhancement or repricing of existing products; iii. Accounts in the financial statement of the pre-need company pertaining to actuarial reserve liabilities and other actuarial reserve items; iv. Financial projections showing the probable income and reserve requirements, enumerating the actuarial assumptions and bases of projections; and v. Such other reports as may be required by the Commission. (b) It shall be the duty of an actuary to immediately report to the Commission any matter contained in, arising out of, or in relation to the above reports requiring intervention of the Commission to protect the interests of planholders: Provided, That the actuary shall not be liable to the pre-need company for any acts done under this paragraph, unless there is a clear showing of bad faith, malice or gross negligence.
RULE 10 REPORTS AND EXAMINATION

Section 44. Annual Pre-need Reserve Valuation Report. (a) Every pre-need company shall annually determine its reserve requirement and contractual liabilities, and submit to the Commission an annual pre-need reserve valuation report within one hundred twenty (120) days from the end of the fiscal year of the preneed company. (b) The valuation report shall contain the assumptions, methodology, formulas used, a summary of the pre-need plans that were the subject of the valuation and the results of such valuation. The report should be duly certified by an actuary accredited by the Commission in the case of contingent plans such as memorial/life plans and by the pre-need companys external auditors or by a qualified actuary in the case of scheduled-benefit plans such as preneed pension and education plans, the liabilities of which are not actuarial in nature. (c) The reserving formula, bases and limits of the assumptions to be used in the valuation of reserves shall be prescribed by the Commission.

(d) The Commission may require any pre-need company to submit an interim pre-need reserve valuation report if any of the following events occurred: i. When there is sufficient evidence that a subsequent event or transaction occurred after the end of the fiscal year and such event would materially affect the computation of the pre-need reserve valuation report submitted; and ii. When the company ceased operation six (6) months after the end of the fiscal year. Section 45. Annual Audited Financial Statements. (a) Every pre-need company shall terminate its fiscal period on the thirty-first (31st) day of December every year. Within one hundred twenty (120) days after the calendar or fiscal year, the pre-need company shall render to the Commission annual financial statements signed and sworn to by its chief executive officer, chief finance officer and external auditors in accordance with a uniform accounting system that shall be prescribed by the Commission, showing in such form and details the exact condition of its affairs. (b) The audited financial statements should be accompanied by the Statement of Managements Responsibility signed under oath by the companys chairman of the board, chief executive officer and chief financial officer, containing the following declaration: The management of (name of the pre-need company) is responsible for all information and representations contained in the financial statements for the year(s) ended (date). The financial statements have been prepared in conformity with rules and regulations of the Commission on accounting and reflect amounts that are based on the best estimates and informed judgment of management with an appropriate consideration to materiality. In this regard, management maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition and liabilities are recognized. The management likewise discloses to the companys audit committee and to its external auditor: (i) all significant deficiencies in the design or operation of internal controls that could adversely affect its ability to record, process, and report financial data; (ii) material weaknesses in the internal controls; and (iii) any fraud that involves management or other employees who exercise significant roles in internal controls. The board of directors reviews the financial statements before such statements are approved and submitted to the stockholders of the company. The (name of the auditing firm), the independent auditors appointed by the stockholders, has examined the financial statements of the company in accordance with generally accepted auditing standards in the Philippines and has expressed its opinion on the fairness of the presentation upon completion of such examination, in its report to the board of directors and stockholders.

(c) Any material omission of disclosures, misstatement or misleading information found in the financial statements, whether interim or annual, shall constitute a violation of these rules and the officer signing such statement shall, after due notice and hearing, be subject to the penalty provided for under these rules and such other sanctions as may be imposed by the Commission. Section 46. Annual Statement of Trust Fund. (a) Every pre-need company shall file with the Commission an annual statement of its trust fund for each type of plan. Such statement shall be in a form prescribed by the Commission and shall include details as to all of the income, disbursements, assets and liability items of and associated with the said trust fund accounts. Said statement shall be made under oath by two (2) officers of the company and shall be filed simultaneously with the annual statement required by the preceding section. (b) Where the trust fund is managed and administered by a trustee as provided under Section 30 of these rules, an annual statement of trust fund for each type of plan shall instead be filed with the Commission. It shall include details such as the income, disbursements, assets and liability items, and shall be certified under oath by at least two (2) of the highest ranking officers of the trustee. Section 47. Publication of Annual Statement. (a) Within thirty (30) days after receipt of the annual statement approved by the Commission, every pre-need company shall publish in two (2) newspapers of general circulation a full synopsis of its annual financial statements, including the trust fund annual statement showing fully the conditions of its business, and setting forth its resources and liabilities in a standardized format to be designed by the Commission. (b) The Commission may require pre-need companies to create and maintain a website wherein its planholders may readily access updated information pertaining to the status of financial condition and results of information of the company. The sufficiency and truthfulness of the contents of such website shall be the responsibility of the company. Section 48. Keeping of Records. The Commission shall require every pre-need company to keep its books, records, accounts and vouchers in such manner that the Commissions authorized representatives may readily verify the companys annual statements and ascertain whether the company is solvent and has complied with the provisions of these rules or the circulars, instructions, rulings or decisions of the Commission. Section 49. Examination. The Commission shall, at least once a year and whenever it considers that the public interest so demands, cause an examination to be made into the affairs, financial condition and method of business of every pre-need company, and of any other person, firm or corporation managing the Fund or affairs and/or property of such pre-need company.

RULE 11 FINANCIAL ACCOUNTING STANDARDS

Section 50. Accounting Rules and Regulations for Pre-need Plans. The Commission shall have the authority to make, amend and rescind such accounting rules and regulations applicable for pre-need companies. The Commission may prescribe, among other things, the form or forms in which required information shall be set forth, the items or details to be shown in the components of the financial statements, and the recognition and measurement basis to be adopted for each account, after considering the nature of the operation of the pre-need industry. Pre-need companies shall strictly comply with such accounting rules and regulations as prescribed by the Commission.
RULE 12 SUSPENSION OR REVOCATION OF AUTHORITY

Section 51. Suspension; Grounds. (a) If the Commission is of the opinion, upon examination or other evidence, that any pre-need company is in an unsound condition, or that it has failed to comply with the provisions of law or regulations, or that its condition or method of business is such as to render its proceedings hazardous to the public or to its planholders, or that its paid-up capital stock is impaired or deficient, the Commission is authorized to suspend or revoke all certificates of authority granted to such pre-need company, its officers and agents, after due notice or hearing. No new business shall thereafter be done by such company or for such company by its agent in the Philippines. (b) The Commission may not lift the order of suspension or revocation of the said authority until the concerned pre-need company shall have submitted a viable business plan showing the companys estimated receipts and disbursements, as well as the basis therefor for the next succeeding three (3) years
RULE 13 CONSERVATORSHIP AND PROCEEDINGS UPON INSOLVENCY

Section 52. Appointment of Conservator. (a) If at any time before or after the suspension or revocation of the license of a pre-need company as provided in Section 51 hereof, the Commission finds that such company is in a state of continuing inability or unwillingness to comply with the requirements of the Code and/or orders of the Commission, a conservator may be appointed to take charge the assets, liabilities, and the management of such company, collect all moneys and debts due the company and exercise all powers necessary to preserve the assets of the company, reorganize its management, and restore its viability. (b) The conservator shall have the power to overrule or revoke the actions of the previous management and board of directors of the said company, any provision of law, or of the articles of incorporation or by-laws of the company, to the contrary notwithstanding, and such other powers as the Commission shall deem necessary. (c) The conservator may be another pre-need company, by officer or officers of such company, or any other competent and qualified person, firm or corporation. The remuneration of the conservator

and other expenses attendant to the conservation shall be borne by the pre-need company. (d) The conservator shall not be subject to any action, claim or demand by, or liability to, any person in respect of anything done or omitted to be done in good faith in the exercise, or in connection with the exercise, of the powers conferred on the conservator. (e) The conservator appointed shall report and be responsible to the Commission until such time as the Commission is satisfied that the pre-need company can continue to operate on its own and the conservatorship shall likewise be terminated should the Commission, on the basis of the report of the conservator or of his own findings, determine that the continuance in business of the preneed company would be hazardous to planholders and creditors, in which case the provisions of Section 53 shall apply. Section 53. Proceedings Upon Insolvency. (a) Whenever, upon examination or other evidence, it shall be disclosed that the condition of any pre-need company is one of insolvency, or that its continuance in business would be hazardous to its planholders and creditors, the Commission shall forthwith order the company to cease and desist from transacting business and shall designate a receiver to immediately take charge of its trust fund, assets and liabilities, as expeditiously as possible collect and gather all the assets and administer the same for the benefit of its planholders and creditors, and exercise all the powers necessary for these purposes including, but not limited to, bringing suits and foreclosing mortgages in the name of the pre-need company. (b) The Commission shall thereupon determine within thirty (30) days whether the pre-need company may be reorganized or otherwise placed in such condition so that it may be permitted to resume business with safety to its planholders and creditors and shall prescribe the conditions under which such resumption of business shall take place as well as the time for fulfillment of such conditions. In such case, the expenses and fees in the collection and administration of the pre-need company shall be determined by the Commission and shall be paid out of the assets of such company. (c) If the Commission shall determine and confirm within the said period that the pre-need company is insolvent, as defined hereunder, it shall, if the public interest so requires, order its liquidation, indicate the manner of its liquidation and approve a liquidation plan and implement it immediately. (d) The Commission shall designate a competent and qualified person as liquidator who shall take over the functions of the receiver previously designated and, with all convenient speed, distribute the trust fund exclusively to the planholders in proportion to termination values of their respective pre-need plans, convert the assets of the pre-need company to cash, or sell, assign or otherwise dispose of the same to the planholders, creditors and other parties for the purpose of settling the liabilities or paying the debts of such company and he may, in the name of the company, institute such actions as may be necessary in the appropriate Court to collect and recover accounts and assets of the pre-need company, and to do such other acts as may be necessary to complete the liquidation as ordered by the Commission.

(e) The provisions of any law to the contrary notwithstanding, the actions of the Commission under this Section shall be final and executory, and can be set aside by the Court upon petition by the company and only if there is convincing proof that the action is plainly arbitrary and made in bad faith. The Commission shall then file the corresponding answer reciting the proceeding taken and praying for the assistance of the Court in the liquidation of the company. No restraining order or injunction shall be issued by the Court enjoining the Commission from implementing his actions under this Section, unless there is convincing proof that the action of the Commission is plainly arbitrary and made in bad faith and the petitioner files a bond in favor of the Commission with the Court in an amount fixed by it. The restraining order or injunction shall be refused or, if granted, shall be dissolved upon filing by the Commission, if he so desires, of a bond in an amount twice the amount of the bond of the petitioner conditioned that it will pay the damages which the petition may suffer by the refusal or the dissolution of the injunction. (f) The Court shall give preference to all proceedings under this rule. The Commission shall not be required to pay any fee to any public officer for filing, recording, or in any manner authenticating any paper or instrument relating to the proceedings. (g) As used in this rule the term Insolvency shall refer to the financial condition of a pre-need company that is generally unable to pay its liabilities as they fall due in the ordinary course of business or that has liabilities that are greater than its assets. (h) In case of liquidation of a pre-need company, after payment of the cost of the proceedings, including reasonable expenses and fees incurred in the liquidation to be allowed by the Court, the Commission shall pay all allowed claims against such company, under order of the Court, in accordance with their legal priority. (i) The receiver or the liquidator, as the case may be, designated under the provisions of this rule shall not be subject to any action, claim or demand by, or liability to, any person in respect of anything done or omitted to be done in good faith in the exercise, or in connection with the exercise, of the powers conferred on such receiver or liquidator. Section 54. Commissions Power to Assume Trustee Functions. In cases where the Commission has ordered the liquidation of the preneed company, the Commission may immediately take custody of the trust fund established by the pre-need company, and the pre-need company shall forthwith deliver custody and an accounting of the same. Henceforth, the Commission shall have the full power and control over the Fund to satisfy the pre-need companys obligations to planholders. Section 55. Liquidation. (a) In cases where the Commission determines that the pre-need company shall be liquidated, it shall have the power to commence insolvency proceedings in the appropriate court which shall have jurisdiction over the assets of the pre-need company, excluding trust fund assets that have been established exclusively for the benefit of planholders.

(b) Proceedings in court shall proceed independently of proceedings in the Commission for the liquidation of claims, and creditors of the pre-need company shall have no personality whatsoever in the Commission proceedings to litigate their claims against the trust funds. (c) In liquidating claims of planholders, the Commission shall ensure that all planholders receive an equitable distribution of their claims, considering the amounts each has paid into their plans, the termination values due each planholder, the present value of their claims and other equitable considerations. The only other claims which may be satisfied by the Commission out of the trust funds are the claims for trustees fees which are reasonable and can be shown to have been incurred in the administration of the trust fund, and taxes incurred under trust.
RULE 14 ADMINISTRATIVE SANCTIONS AND CRIMINAL PENALTIES

Section 56. Administrative Sanctions. (a) The Commission, after proper notice and hearing, may impose any or all of the sanctions provided in subparagraph (b) of this section for the following offenses: i. the making of any untrue statement of a material fact in a registration statement, information brochure and its supporting papers and other reports required to be filed with the Commission; ii. the failure to disclose any material fact required to be stated therein; iii. the refusal to permit any lawful examination into its affairs; and iv. any violation of the Pre-need Code or this Implementing Rules and Regulations. (b) The imposition of the foregoing administrative sanctions shall be without prejudice to the filing of criminal charges against the individual responsible for the violation: i. Cease and Desist Order. The Commission may, motu proprio or upon verified complaint by any party, issue a cease and desist order (CDO) against any pre-need company upon proof, after due notice and hearing, of violation of any provision of the Pre-need Code and these rules: Provided, That such CDO may be issued ex parte if the violation is clearly apparent, injurious to a number of planholders and requires immediate intervention by the Commission. The CDO shall specifically enjoin the pre-need company from performing certain activities and shall impose fines and state the required remedial actions. All proceedings before the issuance of the CDO shall be confidential; ii. Suspension of License. The Commission shall issue a suspension order against the pre-need company if it fails to comply with the CDO within thirty (30) days from issuance thereof;

iii. Revocation of License. The Commission may issue a revocation order of the license of the pre-need company under suspension for a period of ninety (90) days; iv. A fine of not less than Ten thousand pesos (P10,000.00) nor more than One million pesos (P1,000,000.00) plus not more than Two thousand pesos (P2,000.00) for each day of continuing violation; v. Disqualification from being an officer, a member of the board of directors or principal stockholders of a pre-need company; or vi. Other penalties within the power of the Commission under existing laws. (c) The unauthorized sale of pre-need plans shall subject the issuer to a fine as follows: (1) First violation thirty percent (30%) of the aggregate gross pre-need price of the plans sold; (2) Second violation forty percent (40%) of the aggregate gross pre-need price of the plans sold; and (3) Third violation suspension or revocation of license. Failure to pay fines within three (3) months from receipt of notice to pay will cause the Commission to issue a suspension order. Section 57. Criminal Penalties. The following acts are criminal in nature: (a) Selling or offering to sell a pre-need plan by unregistered persons shall be penalized by imprisonment of one (1) year and a fine equivalent to triple the contract price; (b) Selling or offering to sell an unregistered pre-need plan or any product that has pre-need plan features shall be penalized by imprisonment of one (1) year and a fine equivalent to triple the indicated price; (c) Soliciting, selling or offering to sell a pre-need plan by means of false or misleading representation and other fraudulent means shall be penalized by imprisonment of six (6) years and one (1) day to twelve (12) years and a fine in the amount of Fifty thousand pesos (P50,000.00) to Five hundred thousand pesos (P500,000.00); (d) Any negligent act or omission that is prejudicial or injurious to the planholder shall be penalized by imprisonment of one (1) year and one (1) day to six (6) years and a fine in the amount of Fifty thousand pesos (P50,000.00) to Five hundred thousand pesos (P500,000.00); (e) Any fraudulent act or omission that is prejudicial or injurious to the planholder shall be penalized by imprisonment of six (6) years and one (1) day to twelve (12) years and a fine in the amount of One hundred thousand pesos (P100,000.00) to One million pesos (P1,000,000.00); and

(f) Willful violation of the provisions of these rules or orders of the Commission: Provided, That repeated violations shall constitute prima facie evidence against the offender and shall be penalized by imprisonment of six (6) years and one (1) day to twelve (12) years and a fine in the amount of One hundred thousand pesos (P100,000.00) to One million pesos (P1,000,000.00). Any person who violates any other provisions of the Pre-need Code or the rules and regulations promulgated by the Commission under authority thereof shall, upon conviction, be punished by a fine of not less than Fifty thousand pesos (P50,000.00) nor more than Five million pesos (P5,000,000.00) or imprisonment of not less than one (1) year nor more than fourteen (14) years, or both, at the discretion of the court. Should the offense be committed by a juridical person, the penalty may, in the discretion of the court, be imposed on such juridical entity and upon the officer or officers of the juridical entity responsible for the violation. If such officer is an alien, he shall, in addition to the penalties prescribed, be deported without further proceedings after service of sentence.
RULE 15 MISCELLANEOUS PROVISIONS

Section 58. Claims. (a) The Commission shall have the primary and exclusive power to adjudicate any and all claims involving pre-need plans. If the amount of benefits does not exceed One hundred thousand pesos (P100,000.00), the decision of the Commission shall be final and executory. (b) The Commission shall encourage mediation or conciliation as a means to expedite resolution of claims. Section 59. Review of Commission Orders or Decisions. Any person aggrieved by an order or decision of the Commission, whether in relation to its settlement of a claim of a planholder or in the exercise of its regulatory authority, may appeal the order or decision to the Court of Appeals by petition for review in accordance with the pertinent provisions of the Rules of Court. Section 60. Transitory Provisions. (a) Any pre-need company who at the time of the effectivity of the Pre-need Code has been registered and licensed to sell pre-need plans and similar contracts, shall be considered registered and licensed under the provision of the Pre-need Code and these Implementing Rules and Regulations and shall be subject to and governed by the provisions hereof: Provided, however, That compliance for all sections with the exception of Section 21, may be deferred for such reasonable time as the Commission may determine but not to exceed one (1) year unless otherwise specifically provided in the Pre-need Code. (b) With respect to Chapter IV, compliance will cover all new plans sold one hundred twenty (120) days after the effectivity of Pre-need Code. Violations committed prior to the effectivity of the Pre-need Code shall be punished in accordance with the provisions of the laws then in force.

(c) The Commission shall constitute forthwith a special team of experts to handle all matters related to the pre-need industry and shall secure and transfer all the files and records of the SEC to the Commission within ninety (90) days after the effectivity of the Preneed Code. (d) Notwithstanding any provision to the contrary, all pending claims, complaints and cases filed with the SEC shall be continued to its full and final conclusion. The Commission shall also assist the Department of Justice in criminal cases involving matters related to the pre-need industry. Pre-need companies which are, upon approval of the Pre-need Code of the Philippines, under corporate rehabilitation or insolvency proceedings shall continue to be subject to the jurisdiction of the Regional Trial Courts. Section 61. Duty of the Commissioner to Issue Circulars. The Insurance Commissioner shall, from time to time, issue circular letters to supplement these rules. The Commissions existing one-circularone-subject matter rule shall apply. Such circulars shall be sent to all existing pre-need companies, licensed sales counselors and other parties affected by the specific circular at the time of issuance. Each circular shall take effect after fifteen (15) days from the date of issuance unless otherwise stated in the said circular. It shall also be posted in the Commissions official website. Hence, all pre-need companies are hereby required to regularly visit the commissions official website for circular updates. The commissioner may devise such other circular distribution methods as he may deem effective and speedy. He may accredit industry associations as official representatives of their members for the purpose of receiving the pre-need circulars. Section 62. Effect on Existing Law. Any person, natural or juridical, or pre-need plan, authorized, licensed or registered by the SEC under the Securities Regulation Code shall be deemed to have been licensed or registered under the provisions of the Pre-need Code. Such person or plan shall, unless otherwise herein provided, be given a period of one (1) year from the effectivity of the Preneed Code within which to comply with the same. The rights and remedies provided by the Pre-need Code and these rules shall be in addition to any and all other rights and remedies that exist under existing laws. Section 63. Separability Clause. Should any provision of these rules or the application thereof to any person or circumstance be held invalid, the other provisions or sections of these rules shall not be affected thereby. Section 64. Effectivity. These rules shall take effect after fifteen days upon its last publication, which publication shall be done once a week for two (2) consecutive weeks in two newspapers of general circulation in the Philippines. DONE in the City of Manila this 8th day of March 2010.

Battery (crime)
Battery is a criminal offense involving unlawful physical contact, distinct from assault in that the contact is not necessarily violent. In the United States, criminal battery, or simply battery, is the use of force against another, resulting in harmful or offensive contact.[1] It is a specific common law misdemeanor, although the term is used more generally to refer to any unlawful offensive physical contact with another person, and may be a misdemeanoror a felony, depending on the circumstances. Battery was defined at common law as "any unlawful touching of the person of another by the aggressor himself, or by a substance put in motion by him." [2] In most cases, battery is now governed by statute, and its severity is determined by the law of the specific jurisdiction. Specific rules regarding battery depend on the relevant jurisdiction, however some elements remain constant despite jurisdiction. Battery generally requires: 1. An offensive touching or contact is made upon the victim, instigated by the actor 2. The actor intends or knows that his action will cause the offensive touching 1. In some jurisdictions, for instance under the Model Penal Code, there is a battery when the actor acts recklessly Battery is typically classified as either simple or aggravated. Although battery typically occurs in the context of physical altercations, battery also applies in other instances, such as medical cases where the doctor performs a non-consented medical procedure. There is an offence which could be (loosely) described as battery in Russia. Article 116 [1] [2] of the Russian Criminal Code provides that battery or similar violent actions which cause pain are an offence. In the law of England and Wales, battery is not graded, although there are separate offences of an assault occasioning actual bodily harm and infliction ofgrievous bodily harm. Battery consists merely in unlawfully touching another (thus no particular injury is necessary). Battery is distinguished from assault, where the victim is caused to apprehend the immediate commission of a battery. English law also does not recognize any offence of sexual battery, rather having the offence of sexual assault, which is the non-consensual sexual touching of another (s. 3 Sexual Offences Act 2003). There is no separate offence relating to incidents of domestic violence, except in the case of death, where the offence of causing or allowing the death of a child or a vulnerable adult may have been committed (s. 5 Domestic Violence, Crime and Victims Act 2004). Under English law, a battery has only been committed if the correct mens rea (fault element) can be proven. In the case of battery, the mens rea of the offence is intention or recklessness (see R v. Venna [1976] QB 421). A person acts intentionally in terms of a result when his purpose is to cause it and he may be held to act intentionally if he foresees that the result is a virtually certain consequence of his action and he nonetheless acts (see R v. Woollin [1998] 4 All ER 103; although this decision specifically applies to the law of murder, it is generally accepted that this definition of intent applies throughout the criminal law). A person acts recklessly in

terms of a result when he is aware of the risk that the result will occur if he acts and he does so act where no reasonable person would (see R v. Cunningham [1957] 2 QB 396). In DPP v. Taylor, DPP v. Little [1992] 1 QB 645, 95 Cr.App.R. 28, it was held that battery is a statutory offence, contrary to section 39 of the Criminal Justice Act 1988. This decision was criticised[3][4][5] and in Haystead v. DPP 164 JP 396, DC,[3] the Divisional court expressed the obiter opinion that battery remains a common law offence. In England and Wales, it is a summary offence.[6] However, where section 40 of the Criminal Justice Act 1988 applies, it can be an additional charge on an indictment. It is usually tried summarily.[quantify] However if it is tried, it is punishable with imprisonment for a term not exceeding six months, or a fine not exceeding level 5 on the standard scale, or both.[6] See Crown Prosecution Service Sentencing Manual for case law on sentencing (despite the title of the page, the guidance applies to battery as well as common assault). Relevant cases are:

R v. Nottingham Crown Court ex parte Director of Public Prosections [1996] 1 Cr.App.R. (S.) 283 R v. Dunn [2003] 2 Cr.App.R. (S.) 90

There is no distinct offence of battery in Scotland. The offence of assault includes acts that could be described as battery.

[At common law, simple battery is a misdemeanor. The prosecutor must prove all three elements
beyond a reasonable doubt: 1. an unlawful application of force 2. to the person of another 3. resulting in either bodily injury or an offensive touching. The common-law elements serve as a basic template; but individual jurisdictions may alter them, and they may vary slightly from state to state. Under modern statutory schemes, battery is often divided into grades that determine the severity of punishment. For example:

Simple battery may include any form of non-consensual harmful or insulting contact, regardless of the injury caused. Criminal battery requires an intent to inflict an injury on another, as distinguished from a tortious battery.

Sexual battery may be defined as non-consensual touching of the intimate parts of another. At least in Florida, "Sexual battery means oral, anal, or vaginal penetration by, or union with, the sexual organ of another or the anal or vaginal penetration of another by any other object" [4].

Family-violence battery may be limited in its scope between persons within a certain degree of relationship: statutes for this offense have been enacted in response to increasing awareness of the problem of domestic violence.

Aggravated battery generally is seen as a serious offense of felony grade, involving the loss of the victim's limb or some other type of permanent disfigurement. As successor to the common-law crime of mayhem, this is sometimes subsumed in the definition of aggravated assault.

In some jurisdictions, battery recently has been constructed to include directing bodily secretions at another person without his or her permission. In some jurisdictions this automatically is considered aggravated battery. In some jurisdictions, the charge of criminal battery also requires evidence of a mental state (mens rea).

[edit]Distinction between battery and assault

The overt behavior of an assault might be Person A advancing upon Person B by chasing after him and swinging a fist toward his head. The overt behavior of battery might be A actually striking B. Battery requires (1) a volitional act that (2) results in a harmful or offensive contact with another person and (3) is committed for the purpose of causing a harmful or offensive contact or under circumstances that render such contact substantially certain to occur or with a reckless disregard as to whether such contact will result. Assault is an attempted battery or the act of intentionally placing a person in apprehension of a harmful or offensive contact with his or her person. In some places, assault is the threat of violence against another while aggravated assault is the threat with the clear and present ability and willingness to carry it out. Likewise, battery is undesired touching of another, while aggravated battery is touching of another with or without a tool or weapon with attempt to harm or restrain.

How to write clearly EN2 European Commission staff have to write many different types of documents. Whatever the type legislation, a technical report, minutes, a press release or speech a clear document will be more effective, and more easily and quickly understood. This guide will help you to write clearly whether you are using your own language or one of the other official languages, all of which are also working languages of the Commission according to Council Regulation No 1/1958 (still valid today!) These are hints, not rules, and when applying them you should take account of your target readers and the purpose of your document. Three good reasons to write clearly are: to work more effectively together to reduce unnecessary correspondence to build goodwill. Hint 1: Think before you write............................................................................................................................ page 3 Hint 2: Focus on the reader be direct and interesting............................................................................. page 4 Hint 3: Get your document into shape............................................................................................................ page 5 Hint 4: KISS: Keep It Short and Simple ............................................................................................................... page 6 Hint 5: Make sense structure your sentences............................................................................................. page 7 Hint 6: Cut out excess nouns verb forms are livelier .................................................................................. page 8 Hint 7: Be concrete, not abstract ....................................................................................................................... page 9 Hint 8: Prefer active verbs to passive and name the agent ...............................................................page 10 Hint 9: Beware of false friends, jargon and abbreviations....................................................................page 11 Hint 10: Revise and check...................................................................................................................................page 14 Online EU drafting aids......................................................................................................................................page 15 How to write clearly3 1. Think before you write Clear writing starts with and depends on clear thinking. Ask yourself: Who will be reading the document? Three main groups of people read European Commission documents: EU insiderscolleagues in the European Commission or other institutions outside specialists the general public which is by far the largest group. Most European Commission documents are now on the internet and available to everyone. Everything we write and publish as part of our work for the European Commission inevitably affects the public image of the EU. See Hint 2 for tips on reader focus. What are you trying to achieve? What is the purpose of your document? After reading it, what will your readers have to do? make a decision? handle a certain situation? solve a particular problem? change their attitude towards something? What points must

the document cover? Decide on your message Make a list or bubble diagram (see illustration) containing all the points you expect to make, in no particular order. Cross out the irrelevant points. Link the remaining points into related groups. Fill any gaps in your knowledge: make a note of facts you will need to check and/or experts you will need to consult. This approach applies to practically all non-literary texts: memos, reports, letters, user guides, etc. For formal documents such as legislation, specific drafting rules must be followed. An alternative is the 7 questions approach. This is a structured method of covering relevant information: WHAT? My essential message WHO? Persons concerned WHEN? Days, hours, timelines, deadlines WHERE? Places HOW? Circumstances, explanations WHY? Causes and/or objective HOW MUCH? Calculable and measurable data abbreviations abstract jargon long passive4 Be direct and interesting Always consider the people youre really writing for: not just your boss, or the reviser of your translations, but the end users. Like you, theyre in a hurry.Who are they, what do they already know, and what might you need to explain? Try to see your subject from the point of view of your readers: Involve them by addressing them directly (you is an under-used word in European Commission documents). Imagine which questions they might ask, and make sure the document answers them. Maybe even use these questions as sub-headings. For example: What changes will this new policy make? Why is this policy needed? Who will be affected? What do we expect to achieve?. Interest them. Give them only the information they actually need. Leave out as many details of European Commission procedures and interinstitutional formalities as you can. These are meaningless to most readers and simply reinforce the Commissions image as a bureaucratic and distant institution. If they are really essential, briefly say why. 2. Focus on the reader Now you can make your outline.5 Two common problems at the European Commission: 1. Recycling an earlier text without adapting it properly Older models may be unclearly written and may not reflect new circumstances and new drafting practices. Take care to make all the necessary adaptations. 2. Cutting and pasting You may have to use passages from a variety of documents to assemble a new text. Beware of inconsistent terminology, repetition or omission: these can undermine the internal logic and clarity of the end result. 3. Get your document into shape When you start If your outline includes a summary, begin with that: you may find it is enough! Put it at the beginning because that is the first (and sometimes the only) part that people will read.

 Pay particular attention to links that will help readers to follow your logic and reasoning. Choose headings and other signposts that will enable them to find key information to save you repeating it throughout the document. Use informative headings and sub-headings to highlight the most important points of the document. A heading such as Mergers need to be monitored more carefully is more informative than Monitoring mergers. Consider how best to make your points and keep your document reader-friendly: could you use icons, graphs, or tables instead of text? Do you need a glossary or a list of definitions? After the beginning, the next most frequently read part is the conclusion. A reader may skip everything in between to get to the conclusion. Make it clear, concise and to the point. Show your readers the structure of longer documents by including a clear table of contents. As you write Follow our hints below Consult EU drafting aids (see last page) Keep cutting! Be tough ask if each section and each word is really necessary. Cut out superfluous words, but make sure the message is still clear: The deadline to be observed for the submission of applications is 31 March 2010. The deadline for submitting applications is 31 March 2010 Application deadline: 31 March 2010 After youve finished See Hint 10 for advice on revising and checking.6 Short ... The value of a document does not increase the longer it gets. Your readers will not respect you more because you have written 20 pages instead of 10, especially when they realise that you could have written what you wanted to say in 10. They may well resent you for taking more of their time than necessary. Some ways to cut out unnecessary words include: Not stating the obvious. Trust your readers common sense. Not cluttering your document with redundant expressions like as is well known, it is generally accepted that, in my personal opinion, and so on and so forth, both from the point of view of A and from the point of view of B. Not repeating yourself. When referring to, say, a committee with a long name, write out the full name once only: This question was put to the Committee on the Procurement of Language Style Guides. The Committee said that .... Shorter documents and shorter sentences tend to have more impact. As a guide: 1 document = 15 pages at the most 1 sentence = 20 words on average (but sprinkle in a few short sentences!) Unnecessarily long sentences are a serious obstacle to clarity in European Commission documents. Try to break them up into shorter sentences. But remember to include link words (but, so, however) so the coherence doesnt get lost in the process. :and Simple ... Use simple words where possible. Simple language will not make you seem less learned or elegant: it will make you more credible. in view of the fact that as

a certain number of some the majority of most pursuant to under within the framework of under accordingly, consequently so for the purpose of to in the event of if if this is not the case if not if this is the case if so concerning, regarding, relating to on with reference to, with regard to about 4. KISS: Keep It Short and Simple7 Simple, uncluttered style also means: avoiding ambiguity ... If you use the same word to refer to different things, you could confuse your reader: You must hand in your application by Tuesday. You may also submit an application for this deadline to be postponed. Your application ... (what are we talking about now?) You must hand in your application by Tuesday. You may also ask for the deadline to be postponed. Your application ... not changing words just for style ... You may think you can make your document less boring by using different words to refer to the same thing. Again, though, you could confuse your reader: You must hand in your application by Tuesday. The committee may turn down your request... (i.e. your application or is it?). You must hand in your application by Tuesday. The committee may turn it down ... using the positive form, not the negative ... It is not uncommon for applications to be rejected, so do not complain unless you are sure you have not completed yours incorrectly. It is quite common for applications to be rejected, so complain only if you are sure you have completed yours correctly. You may have to write (or improve) a text containing a mass of facts and ideas. Here are some ways of untangling the information so that readers will understand each sentence straight away. Name the agents of each action (see Hint 8) and put the actions in the order in which they occur. Its decision on allocation of EU assistance will be taken subsequent to receipt of all project applications at the Award Committees meeting. When all applicants have submitted their project applications, 1 the Award Committeewill meet 2 to decide 3 howmuch EU aid itwill grant to each one. 4

Dont bury important information in the middle of the sentence. As for reducing roaming charges, the Commission outlined several proposals. The Commission outlined several proposals for reducing roaming charges. The smoking in restaurants ban now seems likely to be implemented. Smoking in restaurants is now likely to be banned. Try to give your sentences strong endings thats the bit readers will remember. Complete institutional reform is advocated by the report in most cases. In most cases, the report advocates complete institutional reform. 5. Make sense structure your sentences6. Cut out excess nouns verb forms are livelier One simple way to write more clearly is to change ... this ... to this: by the destruction of by destroying for the maximisation of for maximising of the introduction of of introducing By making this change, we are simply turning a noun back into a verb. Verbs are more direct and less abstract than nouns. Many nouns ending in -ion are simply verbs in disguise. They often occur in phrases like those below, where verbs would be clearer: carry out an evaluation of evaluate hold an investigation of investigate give consideration to consider There are other nouns that dont end in -ion but which are also verbs in disguise: conduct a review of review perform an assessment of assess effect a renewal of renew So we can make a document clearer by turning some nouns back into verbs: The practice of growing perennials instead of annual crops can bring about an improvement of soil quality by effecting an increase in soil cover. Growing perennials instead of annual crops can improve soil quality by increasing soil cover. 89 7. Be concrete, not abstract Concrete messages are clear abstract language can be vague and off-putting. Too much abstract language might even lead your reader to think either that you dont know what you are writing about or that your motives for writing are suspect. Unless you have a good reason, if you can use a concrete word instead of a more abstract word that means the same, choose the concrete word. Your message will be more direct and therefore more powerful. Sometimes, instead of this ...: you could try this: eliminate cut out achieve an objective meet a target

employment opportunities jobs negative evolution downturn remunerated employment paid work investing in human capital * - (workforce) training - improving (workers) skills - training and education * As this example shows, the problem is often pinning down your exact meaning. TIP: In Word, highlight and right-click on a word and select Synonyms, near the bottom of the menu that appears, to find the word you are really looking for. The list of synonyms will contain both abstract and concrete words. Try to choose a concrete word instead of a vaguer all-purpose one. For example, the word identify is perfectly acceptable, but sometimes a clearer word is better: to identify innovations to spot innovations to identify the participants to name the participants to identify the meaning to see / show / pinpoint the meaning10 8. Prefer active verbs to passive... Another easy step to clear writing is to use verbs in the active voice (the car hit a tree) rather than the passive (a tree was hit by the car). Compare these: New guidelines have been laid down by the President in the hope that the length of documents submitted by DGs will be restricted to 15 pages. The President has laid down new guidelines in the hope that DGs will restrict the length of documents to 15 pages. Look how we can make a sentence clearer by cutting out passives...: unclear: A recommendation was made by the European Parliament that consideration be given by the Member States to a simplification of the procedure. a bit better: The European Parliament made a recommendation that the Member States give consideration to a simplification of the procedure. and finally by using verbs instead of abstract nouns: much better: The European Parliament recommended that the Member States consider simplifying the procedure. and name the agent If you change passive verb forms into active ones, your writing will become clearer because you will be forced to name the agent the person, organisation or thing that is carrying out the action. Its easy to identify the agent here ... This project was rejected at Commission level. The Commission rejected this project. :but impossible here ... It is considered that tobacco advertising should be

banned in the EU. Who considers? The writer, the Commission, the public, the medical profession? Remember that EU documents have to be translated into several languages. If your original document is unclear, you may end up with non-matching translations, as each translator tries to guess what you might have meant and comes up with a different solution. But you dont have to avoid passives at all costs. They can be useful, for example when theres no need to say who is responsible for the action because its obvious (All staff are encouraged to write clearly).11 9. Beware of false friends, jargon and abbreviations Avoid false friends False friends (or faux amis) are pairs of words in two languages that look similar, but differ in meaning. In a multilingual environment like the European Commission, we often mix up our languages. Borrowing between French and English is common. For instance, to control in English normally means to command/ direct or to restrict/limit. It does not mean simply to check/supervise like contrler in French. Using the wrong word can alienate readers, making the EU institutions look like a closed club that is out of touch with the real world. In the worst case, it can lead to misunderstandings and diplomatic incidents (for example, if you just want to say that Luxembourg is small, but you write that Luxembourg is not an important country). French False friend Why is it wrong? Whats the correct word? actuel actual actual means real current, topical adquat adequate adequate means sufficient suitable assister assist at assist means help. attend, participate in attribuer attribute to attribute to means consider to be due to/characteristic of allocate to, assign to complter complete complete means finish supplement dlai delay a delay means a postponement or hold-up(= retard in French) deadline, time limit laborer elaborate (verb) to elaborate means to go into detail draft, develop, produce ventuel eventual eventual means ultimate any prvu foreseen foreseen means predicted provided for, planned important important important is right if you mean significant; but not if you mean> > large matriel material material means matter, information supplies, equipment opportunit opportunity opportunity means chance advisability perspectives perspectives perspective means standpoint prospects, outlook respecter respect to respect means to value or honour someone or something comply with (rules), meet (a deadline) sensible sensible sensible means reasonable sensitive12 Avoid or explain jargon Jargon is vocabulary used by any group of insiders or specialists to communicate with each other, and is acceptable in documents which are only read by that group. However, outsiders (especially the general public) will have to work harder than they need to or want to when reading jargon. Some readersmay even stop reading so make sure that any document you want outsiders to read is as jargon-free as possible.

And if you DO have to use jargon terms in documents for the general public, explain them when you first use them, or add a glossary, a hyperlink or a reference to one of the websites indicated at the bottom of this page. This non-exhaustive table contains a number of terms commonly used in the EU institutions: Jargon term Suggested definition acceding country country about to join the EU acquis (communautaire) body of EU law candidate country country still negotiating to join the EU cohesion approach aimed at reducing social and economic disparities within the EU comitology procedure under which the Commission consults committees of experts Community method method developed for taking decisions in the EU, where the Commission, Parliament and Council work together enlargement expansion of the EU to include new members mainstreaming taking into account in all EU policies proportionality principle that a level of government must not take any action that exceeds that necessary to carry out its assigned tasks subsidiarity principle that, wherever possible, decisions must be taken at the level of government closest to citizens Clear explanations of much jargon can be found in: the Plain Language Guide to Eurojargon section on the Europa website (http://europa.eu/abc/eurojargon/index_en.htm). For definitions of more technical and legal terms arising in an EU context, see the online Europa Glossary (http://europa.eu/scadplus/glossary/index_en.htm).13 Take care with abbreviations Too many unfamiliar abbreviations can make a document incomprehensible and send your reader to sleep: (ERDF + EAGGF + CAP = ZZZ). If the meaning of an abbreviation might not be clear to your reader, you should: write them out in full if the expression only occurs once or twice in the document; or spell them out when you first use them in a document, followed by the abbreviation in brackets, and then use the abbreviation in the rest of the document; and/or attach a list of abbreviations or a hyperlink to show what they stand for. The Main Acronyms and Abbreviations section of the Interinstitutional Style Guide (http://publications. europa.eu/code/en/en-5000400.htm) defines many of the acronyms and abbreviations used in European Commission documents. As always, consider your readers needs: Some readerswill be irritated if commonabbreviations are spelled out. Writing marketing authorisation holder on every other line instead of MAH will make the document much longer. Remember that abbreviations and acronyms can mean different things in different contexts. For example: ESA stands for European Space Agency Euratom Supply Agency European System of Accounts Endangered Species Act Environmentally Sensitive Area Eastern and Southern Africa Electron Stimulated Adsorption and several other alternatives. Source: http://iate.europa.eu ESA

ESA ESA ESA ESA ESA ESA ESA14 10. Revise and cheque check Use spelling and grammar checkers, but be aware that they dont pick up all mistakes. Re-read your document critically, putting yourself in the readers shoes. Are the sentences and paragraphs clearly linked? Do they follow logically from each other? There will always be something you can improve or simplify. Ask colleagues to comment, including some who havent been consulted earlier. Listen to their suggestions carefully. Follow those which improve brevity, clarity and reader-friendliness. Need more help? Even when you have finished your document and made it as clear as possible by following the tips given above you may feel that your writing could still be improved. Perhaps you are not sure of the right verb or preposition to use. Or some sentences may still be longer and more awkward than you would like. You can contact the Directorate-General for Translation (DGT) and ask for your document to be edited. There are two services, depending on the nature of your document: Web pages: i.e. the main pages of a website in html format. To have web pages edited, enter a Poetry request: code WEB (not your DG name), product REV. For advice, contact DGT-D-2-EN. For more information on web editing: http://www.cc.cec/translation/facilities/products/ web/tutorial/index_en.htm Other documents: (in English or French) Send them to the Editing Unit. If you are using this service for the first time or need advice, you can email DGT-EDIT, outlining your requirements. More details at: http://www.cc.cec/translation/facilities/products/ editing_en.htm (in another EU official language) You can ask for linguistic revision of important documents by a native speaker of any official language. Enter a Poetry request and ask for the product REV.15 Online EU drafting aids Detailed information on in-house conventions for English spelling, punctuation and usage is in the English Style Guide produced by the Translation DG: http://ec.europa.eu/translation/writing/style_ guides/english/style_guide_en.pdf Clear writing guides and style guides for several other official languages are also on the Translation DG website: http://ec.europa.eu/translation/ language_aids Information on official publications in all official languages is in the Interinstitutional Style Guide produced by the Publications Office : http://publications.europa.eu/code/en/ en-000100.htm Guidance on drafting Community legislation in all official languages is in the Joint Practical Guide:

http://eur-lex.europa.eu/en/techleg/index.htm For advice on writing for the web, see the Information Providers Guide: http://ec.e