Sunday, December 13, 2015


Is the "Damayan Plan" of cooperatives (and its variants: "Abuluyan", etc.), which provides a sum of money to answer for the funeral services when a member of a cooperative dies, now considered as a "Pre-need Life Plan"?

If so, and as such, it may no longer be granted unless the cooperative  gets a license or authority from the Insurance Commission (IC)?

That is the initial impression (confusion is more like it) that I got when I read IC Circular Letter No. 2015-57, dated December 9, 2015. (View it at\_@dmin\upload\reports\CL2015_57.pdf )

The Circular is titled: "Guidelines Defining Pre-need Life Plans and Other Contracts And Agreements Within its Scope."

We may recall that under item 1.2 of Joint IC-CDA-SEC Memorandum Cir. No. 01-2010, the "Damayan" or "Abuloy" system of cooperatives are excluded  from the definition of an "insurance activity".  (\_@dmin\upload\reports\ICCDASECIMCO1.pdf ).

However, as defined in 1.8 of IC Cir. No. 201-57, "Cooperative Schemes" refer to the provision of future funeral services for members of a cooperative in consideration of a fee and/or in consideration of membership in that cooperative, as may be included or described in or as may be similar to the contracts, arrangements and schemes provided in Sec. 2.1 hereof.

What bothers me (and I wish I were mistaken) is item 2 of this Circular which provides for/defines the "contracts, arrangements and schemes that are considered as Pre-need Life Plans".

Pursuant to this, and under item 2.2 of the above, considered as "Pre-need Life Plans" are, and I quote: "..An arrangement or contract involving payment of membership fees in an association, cooperative, organization or any entity in consideration of the provision of funeral services or casket and/or urn, whether incidental or otherwise and subject to Sec. 2.1.

To those similarly concerned (or confused) on whether "Damayan" or "Abuluyan" this time needs to be discontinued to be granted by cooperatives, unless with a pre-need license/authority from the IC, please shoot a formal query to IC to clarify the above apparent confusion.

It may also be noted that the Pre-need Code of the Philippines (R.A. No. 9829) provides that pre-need companies shall be under the primary and exclusive supervision and regulation of the IC.  So ther.  (END). 

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