The global economic crisis has affected a number of industries worldwide including the Philippine pre-need industry. The trust funds of the industry have not been earning their projected returns. The local stock market and fixed income investments have performed poorly last year causing trust fund deficits.

Compounding the problem of the industry is the ongoing investigation of the Legacy fraud case. This has dragged down the confidence in our industry whose image has already been tarnished when major preneed firms went down years ago.

To address the situation, the Philippine Federation of Pre-Need Plan Companies, Inc. (PFPPCI) was left with three options to consider for its members:

We would like to inform you that we have submitted our proposed Multi Year Capital and Trust Fund Build-up Program last February 2, 2009. However, the SEC declined our proposed program because the assets we offered for contribution to the trust fund and capital does not qualify as acceptable assets under the SEC revised program.

Under the revised program, the acceptable assets that can be contributed to the trust fund and capital are income generating real estate and unlisted shares that are not in any way related to the Preneed company.

The assets we offered are real estate properties that have good values but are not yet income generating. Aside from this, we offered unlisted shares of profitable companies but are affiliates of our preneed company. The SEC did not accept these assets for contribution to our trust fund and capital.

In view of this, SEC has directed our company to refrain from selling new preneed plans effective April 16, 2009. Nevertheless, we will continue to operate as a servicing pre-need company and pay plan benefits of our planholders as warranted.

Prudentialife Market Resource Corporation (PMRC) will continue to operate and market our other services that include Health Plans, Mutual Funds, and Insurance products among others. Notably, our sales for these products have grown significantly last year.

We hope that these developments will be temporary owing to the prevailing economic environment and government efforts to institute much needed regulatory reforms. We are confident we could pursue new opportunities and build the business of Prudentialife beyond the pre-need industry.

We thank you for your trust and confidence for the past 31 years and hope for your continued understanding and support in these trying times.

Sincerely yours,


Jose Alberto T. Alba
President
Prudentialife Plans, Inc.