New Rules on the Registration and Sale of Pre-Need Plans and Similar Contracts and Investments

December 29, 1987 NEW RULES ON THE REGISTRATION AND SALE OF PRE-NEED PLANS AND SIMILAR CONTRACTS AND INVESTMENTS Pursuant to the provisions of the Revised Securities Act, Batas Pambansa Blg. 178 approved on February 16, 1982, the following rules on the registration and licensing of pre-need plans and/or similar contracts and investments sold or offered for sale or distribution to the public in the Philippines by corporations, are hereby promulgated for the information and observance of all concerned. prcd SECTION 1. Scope . These rules shall apply to the following: a) Pre-need plans like life plan, pension plan, education plan, interment plan and similar contracts and investments; b) Contracts covering investments of the pooled savings of an individual and/or group of individuals in profitable placements and/or in sound issues of productive enterprises engaged in commercial, industrial and economic ventures, so as to build retirement funds for the participants that will provide them income (annuity certain) starting at a certain date; c. Contracts covering the sale of some form of property on installment which provide for an initial payment and monthly or annual payment which are deposited towards the purchase of such property which shall be delivered in the future; d. Contracts which provide for the payment and/or performance of future services or services of a fixed value at the time of actual need, payable in cash or installment by investors at stated prices, with or without interest or finance charges and with or without insurance coverage. e) Other similar contracts and investments. SECTION 2. Definition of Terms . As used in these Rules: a) "Commission" means the Securities and Exchange Commission; b) "Pre-need plans" are contracts which provide for the payment and/or performance of future service/services or monetary considerations at the time of actual need, payable in cash or installment by planholders at stated prices, with or without interest and/or insurance coverage; c) "Planholder" means any person, natural or juridical, who purchases pre-need plans, pension plans, life plans or plan agreements or contracts and for whom future services/payments are to be rendered or performed in time of need or to whom property is to be delivered as stipulated and guaranteed by the corporation which sold or issued the plans; d) "Sales Counselors" mean natural persons who are engaged in the sale, whether on commission or salary basis, of pre need plans and/or similar contracts upon authority of the corporation, registered and licensed by the Commission to engage in the business of selling said plans and contracts; e) "Trust Fund" means a fund initially set up, separate and distinct from the paid up capital of the corporation registered and licensed by the Commission to engage in the business of selling pre need plans and contracts and subsequently from planholders' payments, separately established with a trustee bank under a trust agreement approved by the Commission, to pay for annuities, services or property as provided for in the contracts; f) "In Force Plan" means a plan the installments of which are promptly and regularly paid in accordance with the contract; g) "Lapsed Plan" means a plan which is delinquent in payment and the delinquency extends beyond the grace period of at least two (2) months from the last unpaid due installment date; h) "Cancelled Plan" means a plan which has remained delinquent for more than the allowed period of reinstatement but in no case less than two (2) years counted from the start of delinquency. i) "Reserve Fund" means the amount representing at least 10% of the trust fund but in no case less than TWO HUNDRED THOUSAND PESOS (P200,000.00) set aside by a trust company, bank or investment house in cash or short-term liquid investments. SECTION 3. Registration . No corporation shall issue or sell pre-need plans, and/or similar contracts and investments unless such securities shall have been registered and licensed as hereinafter provided, except those plans exempted from these rules pursuant to Section 5 of the Revised Securities Act. SECTION 4. Requirements . All pre need plans, such as education plan, pension plans, life plans, interment or similar contracts and investments, shall be registered and licensed through the filing by the issuer or its authorized representative with the office of the Commission of a sworn registration statement with respect to such plans or contracts containing the following: A. 1. Name of the Issuer 2. Address of the Issuer's principal office; 3. The names and addresses of the directors or persons performing similar functions and the responsible officers of the corporation; 4. The general character of the business actually transacted or to be transacted by the issuer, or its modus operandi showing the feasibility of the project; 5. A statement of the capitalization of the issuer, including the authorized and outstanding capital stock and the amount paid thereon; the number and classes of shares, the description of the respective rights, voting powers, preferences and restrictions of each class; 6. The specific purposes and the approximate amounts to be devoted to such purpose so far as determinable for which the plans or contracts to be offered is to supply funds, and if the funds are to be raised in part from other sources, the amounts and the sources thereof shall be stated; 7. A statement of the issuer's income, expenses and fixed charges during the last fiscal year, or if in actual business for less than one year, then for such time as the issuer has been in actual operation; 8. The remuneration paid during the past year to the directors or persons performing similar functions, and its officers; 9. The amount of issue of the plans or contracts to be offered; 10. The estimated net proceeds to be derived from the plans or contracts to be offered; 11. A statement showing the price at which such plans or contracts are proposed to be sold, together with the amount of commission or other forms of remuneration to be paid in cash or otherwise, for or in connection with the sale or offering for sale thereof; 12. The itemized amount of expenses other than commissions specified in the next preceding paragraph, incurred or to be borne by, or for the account of, the issuer in connection with the sale of the plans or contracts to be offered or properly chargeable thereto, including documentation and other incidental charges; 13. The registration statement shall be signed by the issuer's executive officer, its principal operating officer, its principal financial officer. its comptroller or principal accounting officer or persons performing similar functions. 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. B. In addition to the registration statements, the following documents in triplicate, shall be submitted: 1. Resolution or authority from the issuer for the sale issuance of the plans or contracts to the public; 2. Personal information sheet of the directors of the issuer; 3. Copy of the contract to sell or the plans to be issued to the proposed buyers; 4. (a) Audited financial statements accompanied by long form audit report of the certifying auditors as of a date not more than 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 item 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. (b) If the above cannot be complied with, an unaudited financial statement as of a date not more than 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, an audited financial statement accompanied by a long form audit report of a certifying auditor of a date not more than one year prior to the filing of the registration statement shall be submitted. (c) Audited financial statements for the last three (3) fiscal years immediately preceding the filing of the registration statement, or, if such issuer has been in actual business for less than three (3) years, then for such time as the issuer has been in actual business, year by year. If the date of the filing of the registration statement is more than six (6) months after the close of the fiscal year, financial statements from such closing date up to the date not more than 90 days prior to the filing of the registration statement, certified under oath of the issuer or person performing similar functions, shall be submitted. 5. NBI Clearance of the directors and officers of the issuer, or current passport; llcd 6. Copy of the leaflets, brochures, press releases, handbills or other printed, typewritten or mimeographed literatures which the issuer may distribute to the public; 7. Contracts or agreements and any amendment thereto entered into by the issuer which affect directly the benefits of the planholders such as the insurance contracts, mortuary agreement, transportation agreement and other similar contracts; 8. Trust agreement entered into by the issuer with general agents, agencies, counselors, solicitors or salesmen. C. However, the Commission may provide that any of the above information or documents need to be included in respect to a particular class of plans or contracts if it finds that the requirement of such information or document is inapplicable to such class and that full disclosure thereof for the protection of investors is otherwise included in the registration statement filed in accordance with these rules. D. The issuer engaged in the sale of pre need plans shall have a minimum paid-up capital of P1,000,000.00. However the Commission may increase the required paid up capital based on the ratios it may prescribe and proportionate to the value of plans sought to be registered by the issuer. SECTION 5. Registration Procedure . Upon filing of the registration statement, the Registrant shall pay to the Commission a fee of one-tenth of one percentum of the maximum aggregate price at which such plans or contracts are proposed to be sold (but not less than P1,000.00) and the act of such filing shall be immediately published by the Commission at the expense of the Registrant, 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 or contracts has been filed with it, and that the aforesaid registration statement, as well as the papers attached thereto, are open for inspection during business hours, by interested parties. The Association of Pre-need Plan Issuers duly accredited by the Securities and Exchange Commission shall be seasonably advised of new application for registration. Any interested party may file an opposition to the registration within ten (10) days from the date of the last publication. SECTION 6. Trust Fund . To guarantee the delivery of property or performance of services in the future, a deposit shall be made by the issuer with a trust company, bank or investment house in an amount equivalent to forty percentum (40%) of the gross pre-need price of the plan, if sold for cash, within sixty (60) days upon receipt of payment; for plans sold on installment basis, the following percentage on quarterly gross collections shall be deposited within sixty (60) days following the need of each quarter of the fiscal year of the issuer, to wit: Payment Received Collection on the 1st 20% of plan value 5% Collection on the 2nd 20% of plan value 5% Collection on the 3rd 20% of plan value 60% Collection on the 4th 20% of plan value 65% Collection on the 5th 20% of plan value 65% The proceeds of insurance coverage shall, in appropriate cases, be considered as collections. An actuarial valuation of the sufficiency/adequacy of the trust fund to pay the contractual liabilities of the issuer under the plans issued, shall be submitted to the Commission within one hundred twenty (120) days after the end of every fiscal year of the issuer. The Commission may refer the report to an independent actuary for verification but the expenses incurred therefor shall be charged to the issuer. The actuarial valuation herein required shall not be referred by the Commission for evaluation/comment to an actuary who is connected in whatever capacity with a competing firm. Upon approval by the Commission of the actuarial computation, any deficiency in the trust fund shall be covered through additional deposit within thirty (30) days from notice, or such longer period as the Commission may allow after receipt of notice of deficiency by the issuer. Any excess of the trust fund shall be credited for future deposit requirements. The trust fund (inclusive of earnings) shall be administered and managed by a trust company, bank or investment house authorized to perform trust functions in the Philippines. No withdrawal shall be made from the trust fund except for paying the cost of services rendered or property delivered, bank charges and investment expenses in the operation of the trust fund, cash surrender/termination value payable to the planholders, annuities, contributions to the fund of cancelled plans and taxes on trust funds. The trust fund shall have the following conditions: 1. It must be established independently with the trust department of the trust company, bank or investment house doing business in the Philippines; 2. The Trust Funds received or deposited may be invested in equity and/or money market transactions; provided, that the trust fund shall not be invested in any financing or investment company directly or indirectly controlling or controlled by the issuer, or under direct or indirect common control with the issuer; and provided further, that at least 10% of the trust fund but in no case less than P200,000.00 must be set aside as a Reserve Fund. The Reserve Fund shall be invested only in the following transactions: a) Loans secured by a hold-out on, assignment or pledge of deposits maintained either with the trustee or other banks, or of deposit substitutes of the trustee itself or mortgage and chattel mortgage bonds issued by the trustee; b) Treasury notes or bills, Central Bank Certificates of Indebtedness which are short term and other government securities or bonds, and such other evidences of 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 Item "b" above, as underlying instruments thereof; d) Savings or time deposits with government owned banks or commercial banks; Provided, that in no case shall any such savings or time deposit account be accepted or allowed under a "Bearer", ''Numbered Account" or other similar arrangements; and e) Other investments as the Commission may allow. 3. It must be subject to periodic examination by the Commission. 4. Such other data or information as may be prescribed by the Commission. SECTION 7. Trust Agreement . The Trust Agreement shall be submitted for approval of the Commission and shall contain, among others, the following provisions: a) Manner in which the trust fund is to be operated; b) Investment powers of the trustee with respect to the trust deposits. including the character and kind of investment; c) Allocation, apportionment, distribution dates of income, profits and losses; d) Terms and conditions governing the admission and withdrawal of investment or participation in the fund; e) Auditing and settlement of accounts of the trustee with respect to the fund; f) Basis upon which the fund may be terminated; g) Provisions for withdrawal of the fund, and h) Such other matters as may be necessary or proper to define clearly the rights of the issuer with regard to the trust fund. SECTION 8. Amendments to the Plan Agreement, Contract or Other Documents Pertinent to Registration . No plan agreement, trust agreement, contract or other documents pertinent to the registration of the plans or contracts shall be amended or modified without prior approval of the Commission, and such amendment or modification shall neither affect adversely the planholders thereof nor impair any term or condition in the plan or contract or other related documents. SECTION 9. Licensing of Issuer as Dealer in Securities/General Agents as Brokers . Any issuer selling its own pre-need plans, joint venture contracts, and similar contracts and investments, except those exempted under Section 5 of the Revised Securities Act, shall be deemed a dealer within the meaning of Section 19 of the Revised Securities Act and shall be required to be licensed as such and comply with all the provisions thereof; provided that the issuer selling different types of plans shall be required to be licensed only once for the different types of plans. The issuer must post a surety bond from a bonding company acceptable to the Commission in the amount of Three Hundred Thousand Pesos (P300,000.00) in favor of the Government of the Philippines and conditioned upon faithful compliance with the provisions of the Revised Securities Act and these Rules. The Commission may require additional surety bond depending on the volume of sales of the issuer. If the issuer contracts general agents or agencies, such general agents/agencies shall be duly licensed as brokers by the Commission. General agents or agencies shall post a bond in the amount of One Hundred Thousand Pesos (P100,000.00). Every license under this Section shall expire on the thirty first day of December in each year, but new registration for the succeeding year shall be issued upon application and payment of the fee, without filing of further statements or furnishing any further information unless specifically required by the Commission. Application for renewals must be made not less than thirty (30) days nor more than sixty (60) days before the first day of the ensuing year, otherwise, they shall be treated as original applications. A fee of One Thousand Pesos (P1,000.00) shall be collected for original application and every renewal thereof. Submission of the latest audited financial statements, together with unaudited financial statements as of the last quarter and the actuarial valuation if already due shall be sufficient for application for licensing of additional plans. Likewise, the issuer need not attach documents previously submitted in connection with the filing of original application for the registration/licensing of plans unless any change, amendment or revision had been made therein. A sworn statement to the effect that there has been no change in the information/documents previously filed shall be deemed sufficient. SECTION 10. Salesmen, Counselors or Solicitors . No salesman. counselor or solicitor shall be allowed to solicit, sell or offer to sell pre need plans, pension plans, life plans and similar contracts and investments under this Rule, without being licensed as such by the Commission. License shall be issued upon certification under oath by the issuer that the salesman, counselor or solicitor has been duly trained; Provided that said training program has been approved by the Commission. A salesman shall be licensed only after he has undergone a 3-month on the job training and/or has sold at least P10,000.00 worth of plans. Contracts sold during the apprenticeship period, however, must be co-signed by a duly licensed salesman. Salesmen applying for licensing within the period January to June and within the period from July to December shall pay a licensing fee of P25.00 and P15.00 each, respectively. A salesman selling different types of plans shall be licensed only once. Such license shall cease upon the termination of employment of such salesman/counselor or solicitor by the issuer, provided that it may be renewed for the ensuing year in accordance with the fourth paragraph of the preceding section. SECTION 11. Compliance with the Contract . Upon full payment by the planholder, the issuer shall render to him or his assigns the services or give the value thereof or deliver the property, as stipulated in the contract. In cases falling under Section 1 (e) hereof, the planholder, upon the attainment of a certain age or period or in case of death, his beneficiary shall be entitled to the benefits as provided for in the contract. SECTION 12. Encumbrance, Conveyance or Mortgage of Assets of Issuer . No encumbrance, conveyance or mortgage over all or substantially all of the assets of the issuer shall be allowed without prior approval of the Commission. SECTION 13. Advertisements or Publications made by the Issuer . a) No advertisement or publication in any print or broadcast medium, or by letters, circulars, leaflets, brochures, literature or any other form tending directly or indirectly to promote the sale of pre-need plans and/or similar contracts and investments, shall be made without prior approval of the Commission. b) Any person who 1. offers to sell or sells pre-need plans, similar contracts or investments by the use of any means or instruments of transportation or communication, by means of a prospectus, or oral communication, which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements true in the light of the circumstances under which they were made, the purchaser not knowing of such untruth or omission and who shall satisfy the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission, such salesman or solicitor shall be liable to the person purchasing such pre-need plans and similar contract and investment from him, who may sue, in any court of competent jurisdiction, or recover the consideration paid for such plans, or contracts with interest thereon, upon the tender of such plans or contracts or for damages if he is no longer authorized to sell such plans or contracts. SECTION 14. Jurisdiction Over Cases . All complaints filed by planholders, pre-need plan salesmen, solicitors and pre-need companies against one another shall be referred for appropriate initial action and/or arbitration to the Association of pre-need plan issuers. The Commission shall assume jurisdiction over the complaint upon certification from the Association that parties have chosen to invoke the jurisdiction of the Commission. SECTION 15. Suspension of License or Permit . If, at any time the information contained in the statement filed is or has become misleading, incorrect, inadequate or incomplete or the sale or offering for sale of the plans or contracts may work or tend to work a fraud, the Commission may require from the person filing such statement such further information as may in its judgment be necessary to enable the Commission to ascertain whether the registration of such security should be revoked on any ground specified in Section 16 of the Revised Securities Act, and the Commission may also suspend the right to sell such security pending further investigation, by entering an order specifying the grounds for such action and by notifying by mail or personally or by telephone, confirmed in writing, or by telegraph, the person filing such statement and every broker who shall have notified the Commission of an intention to sell such security. Refusal to furnish information required by the Commission within a reasonable time to be fixed by the Commission, may be a proper ground for the entry of such order of suspension. Upon the entry of such order of suspension, no further sales of such security shall be made until the Commission orders otherwise. cdlex In the event of the entry of such order of suspension, the Commission shall give a prompt hearing to the parties interested. If upon such hearing, the Commission shall determine that the sale of any such security should be revoked on any ground specified in Section 16 of the Revised Securities Act, it shall make the necessary findings and enter a final order prohibiting sale of such plans or contracts. Until the entry of such final order, the suspension of the right to sell, though binding upon the persons notified thereof, shall be deemed confidential, and shall not be published, unless it shall appear that the order of suspension has been violated after notice. If, however, upon such hearing the Commission finds that the sale of the plans or contracts will neither be fraudulent nor result in fraud, it shall forthwith enter an order revoking such order of suspension, and such plan or contract shall be restored to its status as a security registered under the Revised Securities Act, as of the date of such order of suspension. Travel bans may be recommended to be issued by appropriate authority on all the officers and directors of the issuer, upon issuance of a Cease and Desist Order. SECTION 16. Grounds for Revocation of Permit or License . (a) The Commission may, after due notice and hearing, revoke the registration of any security and the permit to sell such security by issuing an order to this effect, setting forth its findings in respect thereto, if upon examination it shall appear that the issuer: 1. Is insolvent, 2. Has violated any of the provisions of the Revised Securities Act, or the rules promulgated pursuant thereto, or any order of the Commission of which the issuer has notice; 3. Has been or is engaged or is about to engage in fraudulent transactions; 4. Is in any other way dishonest or has made any fraudulent representation in any prospectus or in any circular or other literature that has been distributed concerning the issuer of its securities; or 5. Does not conduct its business in accordance with law. The Commission may compel the production of all the books and records of such issuer, and may administer oaths to, and examine, the officers of such issuer or any other person connected therewith as to its business or affairs, and may also require a balance sheet exhibiting the assets and liabilities of any such issuer or its income statement or both to be certified to by an independent certified public accountant. Whenever the Commission may deem it necessary, it may also require the submission of such balance sheet or income or profit statement, or both, with such particulars as the Commission shall point out or require as of the latest practicable date. If any issuer shall refuse to permit an examination to be made by the Commission, its refusal shall be proper ground for the revocation of the registration of, and permission to sell, its securities. If the Commission deems it necessary, it may issue an order suspending the right to sell securities pending any investigation. The order shall state the grounds for taking such action, but such order of suspension, although binding upon the person notified thereof, shall be deemed confidential, and shall not be published. Upon the issuance of the suspension order, no further sale of such security shall be made until the same is lifted or set aside by the Commission. Any such sale shall be void. Notice of issuance of such order shall be given by mail, or personally, or 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 security. b) A registration statement may be revoked by the Commission upon petition made for its withdrawal by the issuer with the consent of the Commission and as herein provided: A) Documents required to be filed An application for the revocation/withdrawal of a registration statement should be accompanied by the following, to wit: 1. Petition or application for the revocation/withdrawal of the License/Permit to Sell Securities to the public stating the reasons therefor; 2. Proof of the reasons for revocation/withdrawal of license; 3. Proof of publication of a Notice to Stockholders/Investors of said revocation/withdrawal; cdll 4. Board Resolution certified under oath by the Corporate Secretary and attested to by the President or one performing similar functions approving such revocation/withdrawal. 5. List of all stockholders/planholders/investors. 6. In the case of pre-need plan issuers, a Certification under oath by the Treasurer attested to by the President that the planholders' contributions were refunded and their claims fully settled; 7. A joint and several assumption of liability executed by the Treasurer and President of the issuer for claims that may arise as a result of said revocation/withdrawal; and 8. Sufficiency of trust fund to cover payment of cash surrender/termination values. B. Procedure Upon presentation of the documents required for voluntary revocation/withdrawal of the license and payment of the filing fee of P500.00 the facts of the petition shall immediately published by the Commission, at the expense the issuer in two (2) newspapers of general circulation, once a week for two (2) consecutive weeks reciting the petition for voluntary revocation/withdrawal of the registration the securities and permit to sell to the general public and that persons, planholders or stockholders, affected by said revocation/withdrawal may file their claims with the company. 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 complete and that no party stands to suffer damage thereby it shall prepare an ORDER revoking said Registration/License or Permit to Sell Securities to the Public, without prejudice to the filing of claims for damages. SECTION 17. Inspection of Books, Reports and Papers . The books, records and papers of the issuer shall be subject to examination by Commission from time to time to the extent and in the manner prescribed by the Commission and to require such report or information as shall keep reasonably current the information and documents required to be included in or filed with the registration statement order to determine the operation of the issuer. SECTION 18. Branches, Extension Offices or Units . Any individual, partnership or corporation duly registered and licensed to offer/solicit/sell pre-need plans, pension plans, life plans and similar contracts and investments, desiring to establish or operate a branch, extension office or unit, in any locality, may be so permitted upon prior clearance from this Commission. Any change in address, closure or suspension of operation of said branch, extension office or unit shall require prior approval of the Commission. An issuer may be required to put up additional capital for the establishment of branches, extension offices or units, in an amount to be determined by the Commission. SECTION 19. Penalty for Issuance/Sale of Plans In Excess of Authorized Amount . The issuance/sale of pre-need plans, pension plans, life plans and similar contracts and investments in excess of the amount authorized under a permit/license granted to the issuer shall be penalized by a fine, in such amount depending on the frequency of the violation and/or suspension of operation. First Violation 2/10 of 1% of the aggregate gross pre-need price of the plans sold. cdll Second Violation 3/10 of 1% of the aggregate gross pre-need price of the plans sold. Third Violation 4/10 of 1% of the aggregate gross pre-need price of the plans sold. Fourth and Succeeding Violations Suspension or revocation of license. Overpricing of plans above the amounts stated under said permit/license shall be penalized, by a fine based on the price difference realized from such sales and/or suspension of operation: First Violation 2/10 of 1% of the difference between the authorized plan value and the value of the overpriced plan. Second Violation 3/10 of 1% of the difference between the authorized plan value and the value of the overpriced plan. Third Violation 4/10 of 1% of the difference between the authorized plan value and the value of the overpriced plan. Fourth and Succeeding Violation Suspension or revocation of license. SECTION 20. Default; Reinstatement Period . Every issuer must provide in all contracts issued to planholders, a grace period of at least two (2) months within which to pay unpaid installments. Non payments beyond the grace period shall render the plans without force and effect but the planholder shall be allowed a period of not less than two (2) years within which to reinstate his plan. No cancellation of plans shall be made by the issuer during such period when reinstatement may be effected. SECTION 21. Termination Values . A planholder may terminate his in-force plan at any time by giving written notice to the issuer and said planholder shall be entitled to termination values which should not be less than the following: Payment Received 20% of plan value or less 0% of total payment 40% of plan value 20% of total payment 60% of plan value 30% of total payment 80% of plan value 40% of total payment 100% of plan value 50% of total payment SECTION 22. Administrative Sanctions . If, after proper notice and hearing, the Commission finds that there is a violation of this rule, or that any registrant has, in a registration statement and its supporting papers and other reports required to be filed with the Commission made any untrue statement of a material fact, or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or refused to permit any examination into its affairs, it shall, in its discretion, impose any or all of the following sanctions: cdlex a) Suspension or revocation of its certificate of registration and permit to offer securities; b) A fine of no less than Two Hundred (P200.00) Pesos for each day of continuing violation but not more than Fifty Thousand (P50,000.00) Pesos in aggregate fine; c) Disqualification from being an officer, member of the board of directors or principal stockholder of an issuer securities are or are about to be registered pursuant to this Act; and d) Other penalties within the power of the Commission under existing laws. The imposition of the foregoing administrative sanctions shall be without prejudice to the filing of criminal charges against the individual responsible for the violation. SECTION 23. Transitory Provision . Any issuer which at the time of the effectivity of these rules has been registered and licensed to issue pre-need plans and similar contracts and investments shall be considered as registered and licensed under the provisions of these rules and shall be subject to the terms and conditions of the license and shall be governed by the provisions hereof. SECTION 24. Repealing Clause . All rules and regulations or any part or provision thereof, inconsistent with these rules or any part or provision thereof, are hereby repealed or modified accordingly. SECTION 25. Effectivity . The Rules shall take effect fifteen (15) days after the date of last publication in two newspapers of general circulation in the Philippines. (SGD.) JULIO A. SULIT, JR. Chairman Securities and Exchange Commission