Insurance Commission stops operations of 2 pre-need firms

Business.(Business File photo)

TWO pre-need companies with a presence in Cebu received cease and desist orders for engaging in business and operating without the appropriate license.

On Jan. 30, 2024, the Insurance Commission (IC) issued a notice to the public about the cease and desist order against Koinonia Funeral Homes OPC (KFHO) and the Koinonia Group of Believer Ministries Inc. (KGBMI) for violating Republic Act 9829, also known as the Pre-Need Code of the Philippines, which regulates the establishment of pre-need companies.

This came after the denial of KFHO and KGBMI’s motion for reconsideration in July 2023. The IC has affirmed its stance, ordering KFHO and/or KGBMI to “cease and desist from further engaging in their layaway program.” The cease and desist order was issued following the IC’s investigation due to several complaints received by the commission.

As of Dec. 29, 2023, there are only 16 pre-need companies and two servicing companies with certificates of authority for licensing year 2023, according to IC’s website. Unfortunately, KFHO and KGBMI are not on the list.

KFHO is a company that offers a layaway program on funeral services, wherein the consumer makes a down payment on an item, which the store then holds for them while they pay the remainder of the price in installments.

In insurance, a layaway program typically refers to a payment arrangement where policyholders can pay for their insurance coverage in installments over a specified time. This allows individuals to spread out the cost of their insurance premiums, making it more manageable and affordable. It’s similar to a layaway plan in retail, where customers reserve an item and pay for it over time before taking possession of it.

As of Feb. 2, 2024, KFHO offers a layaway program for metal caskets for only P380 per month and wooden caskets for P250 per month, both payable within five years.

According to the IC, KFHO and KBGMI, with several branches in the Visayas and Mindanao, are operated by Jose Suelto Pancho with known addresses in Barangay Tubtubon, Sibulan, Negros Oriental; and Bato, Toledo City, Cebu.

According to KFHO’s website, it has seven branches in Cebu at the Rivergate Building in Cebu City, collection offices in Liloan, Sibonga, Toledo and Balamban, a coordinating office in Naga City and a branch in Lapu-Lapu City. The company also has a presence in Bohol, Aklan, Davao, Iloilo, Leyte, Negros Occidental, Negros Oriental, Siquijor and South Cotabato.

As of May 2022, the company has over 122,000 plan holders, according to its website.

As of this writing, social media posts are circulating advertising the services of KFHO, with some posts asking for members of the public who are interested in becoming a member or an agent.

“Because of the cheap price and the good service of Koinonia, many people immediately became members,” reads one of the social media posts written in Cebuano dated Jan. 27, 2024.

Pre-need companies are corporations duly licensed by the IC and registered to operate and engage in selling pre-need plans or contracts such as life plans, pension plans, educational plans, or other similar contracts and investments.

Under the pre-need law, no person shall operate as a pre-need company or engage in the business of a pre-need company unless licensed by the IC. The license will expire one year from the time of the registration.


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