| MANILA BULLETIN B-8 | Monday, June 26, 2006 |
Lorenzo T. Ocampo, PetPlans president, said the move “is the best alternative we can take to protect the interests of our planholders. The present regulatory environment and the continuing rapid decline of the market no longer allow us to assure our planholders peace of mind, which is the whole point of the pre-need business”.
Ocampo assured that PETPlans will continue to pay scheduled education, pension and memorial benefits to its plan holders even while the plan is awaiting approval by the court.
The company intends to shift its business into what it calls business hubs- the Network Hub with sell life, non-life, HMO, and memorial park lots; OFW Hub will provide money transfer, and documents and parcel delivery services; and Financial Hub will provide loans and credit card facilities.
The pooled fund will be managed independently and invested in a sound portfolio by one of the country’s largest and most reputable institutions that is accessible to planholders nationwide.
To satisfy legal requirements that will pave the way for this conversion, PETPlans field a petition for rehabilitation with the Makati Regional Trial Court yesterday. The firm asked for the court’s permission to convert all outstanding pre-need plans and contracts into a professionally managed trust fund.
“Once outside of the pre-need industry’s restricted guidelines,” Ocampo said, “the trust funds can take advantage of broader investment parameters that allow for better risk management, non-realistic asset-liability matches, and higher returns.”
The company will continue to remain in operation but under a new name, PETLink Financial Corporation.
“Since it will no longer be subjected to the uncertainties and restrictions in the pre-need environment, the company is optimistic that the converted funds will generate reasonable returns for the planholders”, Ocampo said.
PETPlans will continue to pay planholders whose educational, pension and memorial benefits are due pending the approval of the conversion petition.
In the conversion planholders will exchange their pre-need plans , contracts and insurance certificates and a Fund Certificate indicating a certain value proportionate to their share in fund.
All subsequent installments or payments made by amortizing planholders will be deposited directly into the Fund, for which additional certificates with the corresponding value will be issued to the planholders.
Once the conversion completed, holders of fully paid Fund certificates may decide to hold on to their investment so that it may continue to grow or may withdraw from their investment.