Additional Annual Reportorial Requirements

September 21, 1992 SEC-BED * MEMORANDUM CIRCULAR NO. 02-92 TO : All Pre-need Companies SUBJECT : Additional Annual Reportorial Requirements In order to review the valuation of actuarial liabilities, every pre-need company licensed to operate in the Philippines shall submit within one hundred five (105) days from the end of its fiscal year the following: 1. Actuarial Report duly certified by a SEC accredited actuary which includes the following for each plan: 1.1 Description of benefits and guarantees 1.2 Amount registered and licensed, date registered and licensed 1.3 Distribution of Issued Contracts showing numbers and amounts, by issue year 1.4 Actuarial assumptions used in the valuation of reserves interest rate inflation rate contingent benefit availment rate, if applicable present actual cost of benefits as of valuation date, if applicable 1.5 Actuarial formulas and methods used in the valuation of reserves 1.6 Justification for any changes in actuarial assumptions or methods cdll 1.7 Certification and statement of opinion as to the appropriateness and reasonableness of the assumptions and level of reserves 2. Sworn statements from insurance companies certifying the coverages or guarantees assumed by the company indicating extent, term and duration of such coverages and/or guarantees 3. Sworn statements from Trustee Banks on the Trust Accounts, including 3.1 statement that trust accounts are maintained in accordance with trust agreement which had been approved by SEC 3.2 statement that trust accounts are free from liens and encumbrances other than liabilities indicated in the trust fund statement 4. Sworn statements from the responsible officers of the pre-need company stating that 4.1 The SEC required amount to be contributed to the trust fund is duly placed 4.2 Only withdrawals allowed by SEC had been made from the trust fund 4.3 Deficiencies, if any, in trust fund has been duly covered up (submit proof) 5. Schedules showing the data for the last 5 years or a shorter period, if applicable, on the required actuarial reserves, trust fund equity, and investment rate of return on the trust fund The foregoing certifications, reports and schedules required shall be accomplished in accordance with the attached forms. This Circular shall take effect immediately and the initial report shall cover the fiscal year ending December 31, 1992. llcd (SGD.) ROSARIO N. LOPEZ Chairman Securities and Exchange Commission EXHIBIT A VALUATION CERTIFICATION Please be informed that I have undertaken the actuarial valuation of the pre-need plans of (Name of Issuer Company) as of (date) I have relied on data submitted by (Name of Person and Title), and have conducted tests necessary to satisfy myself as to the reasonableness of such data. prcd The actuarial assumptions used in this actuarial valuation are in my opinion, reasonable and appropriate for the plans included in this actuarial valuation. The actuarial reserve liabilities for all benefits and guarantees therein are valued in accordance with the assumptions, and all insurance benefits included in the plan agreement are adequately covered under a separate insurance contract. I hereby certify that the actuarial formulations used in this actuarial valuation are in accordance with generally accepted actuarial principles and practices, and also with the legal requirements. The reserve liabilities aggregating to (amount) in this actuarial valuation are in accordance with the above actuarial formulations and assumptions. Enclosed is a summary of the above actuarial formulations and assumptions. Based on the Trustees' certification/s, the Trust Fund Equity has a net balance of (amount) as of (date) Case A. If Trust Fund is sufficient: The Trust Fund Equity is sufficient to cover the actuarial reserve liabilities. Case B. If Trust is deficient: The deficiency from the actuarially valued reserve liabilities amounting to (amount) should be in the Trust Fund within the time limit prescribed by the SEC regulations. EXHIBIT B SUMMARY OF ISSUED CONTRACTS As of (Fiscal Year Ending) Type of TOTAL Plan 1 Plan 2 Issued Contract Contract Contract Contract No. Price No. Price No. Price TOTAL P _______ P_______ P_______ 1. Actively Paying 2. Delinquent within reinstatable period 3. Fully paid contracts not yet availing 4. Fully paid availing contracts 5. Surrendered Contracts 6. Delinquent beyond reinstatable period 7. Fully Serviced Contracts Definitions (1) Actively Paying Contracts Contracts with contributions not delinquent and whose payment periods have not expired (2) Delinquent Contracts within reinstatable period Contracts with installments in default but are within 2 years from due date of first unpaid installment, or reinstatable period, if longer (3) Fully Paid Contracts, not yet availing Contracts which have been paid but where benefit period has not begun (4) Fully Paid Availing Contracts Contracts which have paid the initial benefit and are in the benefit payment period (5) Surrendered Contracts Contracts which have been surrendered for their termination values (6) Delinquent beyond reinstatable period Contracts with installments in default and are beyond reinstatable period (7) Fully Serviced Contracts Contracts where all the promised benefits have been paid. EXHIBIT C RESERVES BY PLAN * EXHIBIT C.1 Name of Plan: ________________________________ Amount Registered and Licensed : ________________________ Date Registered and Licensed : ________________________ Amount Issued to Date : ________________________ Description of Benefits: (including insurances and guarantees) Actuarial Methodology and Formulas: Present Value of Future Benefits, Benefit costs, Benefit expenses Present Value of Future Net Contributions Reserves Actuarial Assumptions: * Segregate plans into: A. EDUCATIONAL PLANS (1) For Actual Cost Plans Present Actual Cost of Plan Benefits Interest Rate Inflation Rate (2) For Fixed Value Plans Interest Rate B. PENSION PLANS (1) For Fixed Benefit Interest Rate C. FOR MORTUARY TYPE PLANS (1) For Actual Cost Plans Present Actual Cost of Plan Benefits Interest Rate Inflation Rate Availment Rate (2) For Fixed Cost Plants Interest Rate Availment Rate Definition of Terms: * Benefit Costs, e.g., premiums for insurance benefits * Benefit Expenses expenses for settlement of benefits * Actual Cost Plans plans where benefit is actual cost at time of availment * Fixed Value Plans plans where benefit is fixed at time of purchase prcd EXHIBIT C.1.1 RESERVES ON ISSUED CONTRACTS, ACTIVELY PAYING EXHIBIT C.1.2 RESERVES ON ISSUED CONTRACTS DELINQUENT AND WITHIN REINSTATABLE PERIOD EXHIBIT C.1.3 RESERVES ON FULLY PAID CONTRACTS, NOT YET AVAILING EXHIBIT C.1.4 RESERVES ON FULLY PAID AVAILING CONTRACTS EXHIBIT D VALUATION SUMMARY EXHIBIT E SUMMARY OF INSURANCE COVERAGES EXHIBIT F SUMMARY OF TRUST FUNDS EXHIBIT G 5-YEAR EXPERIENCE SUMMARY