Trust Fund; Appraisal Increments, Salesmen and Others

February 1, 1990 SEC-BED * MEMORANDUM CIRCULAR NO. 02-90 TO : All Pre-Need Companies RE : Trust Fund; Appraisal Increments, Salesmen and others In order to more effectively ensure that the investments in pre-need plans are amply protected, the following measures are hereby adopted for the observance of all concerned: 1. Appraisal or re-appraisal of real estate properties shall be made only once a year provided that only 70% of the increment may be allowed to cover any deficiency or future deposit requirement. The allowed increment shall be subject to the 10% liquidity reserve requirement. 2. In the computation of the 10% liquidity reserve, investments in SEC registered commercial papers and investments in commercial and industrial stocks and in mining or oil issues listed in the Big Board of the Stock Exchanges may be considered. 3. Only reasonable withdrawals for minor repairs and ordinary maintenance of trust fund assets may be allowed. However, a profit and loss statement in the maintenance of the said assets must be attached to the quarterly trust fund statement and any reduction in value due to the expenses should be covered by additional deposits. 4. In the trust fund statement, marketable securities may be valued at lower of cost or market or market value provided full disclosure is made of the total cost and market as of statement date. The incremental value of the blue chip securities and those listed in the Big Board may be allowed to cover any deficiency or future deposit requirement subject to such limitations as may be imposed by the Commission. 5. In the submission of names of salesmen, the same must be alphabetically arranged to facilitate processing. 6. In the report of sales, the total value of plans sold, number of plans, etc. should be indicated to facilitate recording. 7. On or before March 1, 1990, all issuers of pre-need plans shall file a list of their salesmen apprenticeship. All salesmen on apprenticeship employed thereafter shall be reported within fifteen (15) days from the date of their employment. Those who will be noted during the audit as having received commissions but whose names are not among those submitted as licensed salesmen shall be deemed unlicensed, for which appropriate penalty will be imposed. LibLex (SGD.) ROSARIO N. LOPEZ Chairman