Mr. Jose C. Leynes

January 16, 1984 Mr. Jose C. Leynes Carlos J. Valdes & Co. CJVC Building, Aguirre St. Legaspi Village, Makati Sir : This has reference to your letter dated August 30, 1983 requesting opinion on issues stated therein. prcd It appears from your letter that your client, LOYOLA LIFE PLAN INC. (LLPI) deals in the sale of life plans whose primary objective is to relieve the family of the buyer or planholder from the burden of making funeral arrangements upon his death. As an investment contract, the life plan guarantees to pay the planholder an amount equivalent to 200% of the plan base value. This amount increases by 10% annually after full payment which assures the planholder of funeral services up to the amount of Memorial Service Benefits earned at the time of his death. Based on the foregoing, the following issues are presented for resolution: 1) Whether the life plan sold by LLPI is considered a "security" within the meaning of the Revised Securities Act. 2) Whether LLPI is a dealer in securities. As noted in the above-mentioned letter, the meaning of "securities" has been redefined in Batas Pambansa Blg. 178 otherwise known as Revised Securities Act to include "pre-need plans, pension plans, life plans, joint venture contracts and similar contracts and investment where there is no tangible return of investment plus profits but an appreciation of capital as well as enjoyment of particular privileges and services". Section 2(a), BP 178). With such express provision of law, we answer the first issue in the affirmative. As to whether Loyola Life Plan, Inc. is a dealer in securities, quoted hereunder for reference is the pertinent provision of Section 19 of the Revised Securities Act: "Any issuer of a security required to be registered under the provision of this Act, selling such securities except in exempt transactions as defined in this Act, shall be deemed a dealer within the meaning of this Section and required to comply with all the provisions hereof." (last sentence, last paragraph) Considering that life plans are now deemed securities and the same not being among the exempt securities enumerated in Section 5 of the Revised Securities Act, said securities cannot be sold or offered for sale or distribution to the public within the Philippines unless registered and permitted to be sold pursuant to Section 4 of the said Act. Thus, Loyola Life Plan, Inc. which deals in the sale of life plans is covered by the aforequoted provision and shall be considered as dealer in securities. We, therefore, answer your second query also in the affirmative. LexLib Very truly yours, (SGD.) MANUEL G. ABELLO Chairman