Comm2 Reviewer — Part I-F: Pre-Need Plans

PART 1 — SYLLABUS

1. Coverage Map

2. Learning Objectives

1. State the Sec. 4(b) pre-need plan definition cold and use it to exclude stockholder perks and HMO contracts (hospital-share problem, IC Letter Opinion 2022-01, and EO 192 s. 2015).
2. Recite the Sec. 2 four-point State policy and the Sec. 3 pro-planholder construction rule, and route every ambiguity through them.
3. Classify any person in a fact pattern as company, planholder (with assignee/transferee/successor), beneficiary, sales counselor, general agent, actuary, or 25%-control affiliate, and name who licenses each.
4. Run the Sec. 48 suspension/revocation triggers and the 3-year viable-business-plan lift condition.
5. Sort any plan into fixed-value, scheduled-benefit, or contingent-benefit and into in-force, lapsed, or cancelled, and state the Sec. 17 prior-approval gate for every form.
6. Run the Sec. 23 default sequence: 60-day grace, lapsed status, reimbursement of late payments, 2-year reinstatement, two 30-day notices, no cancellation inside the window.
7. Run the Sec. 24 termination rules for both sides, including the termination-value schedule requisites and the three company-offer conditions.
8. Apply the Sec. 26 payment clocks and Sec. 28 delay consequences, list the five Sec. 25 unfair practices, and price the violation (suspension or revocation).
9. Run the trust-fund spine: sole-benefit and creditor-proof character, deposit percentages and 20-day timing, 15%/125% liquidity reserve, investment caps, 120-day valuation, 60-day deficiency funding, and the suspend, conserve, receive, liquidate ladder with the Sec. 55 P100,000.00 adjudication ceiling and Sec. 56 CA review.

3. Authority Inventory

A. Cases

B. Laws and Rules

4. Three-Pass Study Plan

Why this order: the authority filter first (RA 9829 numbers decide every classification), then confusion pairs win marks (lapsed/cancelled, grace/reinstatement, scheduled/contingent, suspend/conserve/receive), then timed practice applies the clocks.

5. Syllabus Self-Check

1. Recite Sec. 4(b) verbatim and name its three benefit forms and two payment forms. — §1
2. State the four Sec. 2 policy aims and the Sec. 3 construction rule without notes. — §1
3. Why are hospital-stockholder free-board perks not pre-need plans and not HMO contracts? — §1
4. Name the three parties plus the four other regulated persons and the licensing gate for each. — §2
5. What Affiliate-control percentage triggers Sec. 4(i), and what are its two prongs? — §2
6. List the four Sec. 48 suspension/revocation triggers and the 3-year lift requirement. — §2
7. Sort a plan as fixed-value, scheduled, or contingent and as in-force, lapsed, or cancelled on given facts. — §3
8. State the Sec. 17 prior-approval rule and the Sec. 16 actuary conflict bar. — §3
9. Reconcile Sec. 3 pro-planholder construction with Gaw’s literal-enforcement holding. — §3
10. List the Sec. 14 registration contents and the 45-day filing trigger. — §4
11. State the Sec. 18 advertising rule, the 10-working-day effect, and the second-violation price. — §4
12. Run the Sec. 23 sequence: grace length, lapsed trigger, reimbursement, reinstatement window, the two notices, cancellation bar. — §4
13. State both Sec. 24 termination rules with the schedule requisites and the three company-offer conditions. — §5
14. State the Sec. 26 clocks and delay price for scheduled vs contingent plans. — §6
15. List the five Sec. 25 unfair practices and their license consequence. — §6
16. State the Sec. 30 sole-benefit/creditor-proof rule and the Sec. 31 deposit percentages and timing. — §7
17. State the Sec. 37 liquidity reserve formula and the Sec. 36 deficiency clock. — §7
18. Run suspend, conserve, receive, liquidate in order with the deciding test at each rung. — §7

PART 2 — BOOK + AUTHORITY REVIEWER

0. One-Page Outline

Framing questions per problem: is the arrangement a Sec. 4(b) plan at all? who is the actor (party or regulated person) and what license gates him? what clock, percentage, or notice applies? which rung of the distress ladder, and which forum reviews it? Mnemonics. Policy counts 4: Regulate, Sound, Savings, Prevent. Parties count 3 plus 4: company, planholder, and beneficiary, plus counselor, actuary, agent, and affiliate. Clocks run 45-60-2-30-30: register within 45 days, grace for 60 days, reinstatement within 2 years, and two 30-day notices. Claims run 15-30-twice: 15-day scheduled delay price, 30-day contingent payment, and twice legal interest. The fund runs 45-51-20-15-125: 45% life deposits, 51% education-pension deposits, 20-day remittance, 15% reserve, and 125% cover. Distress runs S-C-R-L: Suspend, Conserve, Receive, Liquidate.

1. Defined; Governing Law and State Policy; Insurance Commission

“Pre-need plans” are contracts, agreements, deeds or plans for the benefit of the planholders which provide for the performance of future service/s, payment of monetary considerations or delivery of other benefits at the time of actual need or agreed maturity date, as specified therein, in exchange for cash or installment amounts with or without interest or insurance coverage and includes life, pension, education, interment and other plans, instruments contracts or deeds as may in the future he determined by the Commission.

— Sec. 4(b), RA 9829 (verbatim from LawPhil full text, where “he” for “be” is the source page’s own rendering)

It is the policy of the State to regulate the establishment of pre-need companies and to place their operation on sound, efficient and stable basis to derive the optimum advantage from them in the mobilization of savings and to prevent and mitigate, as far as practicable, practices prejudicial to public interest and the protection of planholders. The State shall hereby regulate, through an empowered agency, pre-need companies based on prudential principles to promote soundness, stability and sustainable growth of the pre-need industry.

— Sec. 2, RA 9829

Any doubt in the interpretation and implementation of any provision in this Code shall be interpreted in favor of the rights and interests of the planholder.

— Sec. 3, RA 9829

All pre-need companies, as defined under this Act, shall be under the primary and exclusive supervision and regulation of the Insurance Commission.

— Sec. 5, par. 1, RA 9829

Distinction table: pre-need plan vs HMO contract vs stockholder perk.

Case: Visitacion Gavina Gaw v. CA, RTC Pasay Br. 113, Pacific Plans, Inc., G.R. No. 147748, Apr. 19, 2006

Facts: In 1982 Gaw bought a Provincial Memorial Plan (Agreement No. 93945-5). Her mother died the morning of July 9, 1996. Her brother at once engaged Funeraria Baluyot, which embalmed the body and supplied a casket. Only that evening did Gaw notify Pacific Plans of her intent to assign the plan to her mother. The company refused memorial services. Gaw later dealt with accredited Funeraria Tolete, sought a replacement casket, sold a P150,000.00 farm lot for P50,000.00, and incurred P23,500.00 funeral expenses. MeTC ruled for her. RTC reversed. CA affirmed the dismissal.

Issue: Whether the provider is liable for damages for refusing the memorial services.

Held: Petition denied. The plan is the law between the parties. Clear terms control literally. Par. III gave Pacific the sole and exclusive right to arrange services with a mortuary of its choice, and notice directly to and acknowledged by Pacific before acting was imperative, time being of the essence. Evening notice after embalming and casketing preempted that prerogative and breached the plan. The casket upgrade likewise breached par. I(A): the plan delivered the pre-selected casket, and the different casket’s cost is Gaw’s alone since Pacific never consented and contracts bind only parties. The plan is a contract of adhesion but as binding as any contract since adherence is rejectable. Courts make no new contracts to avoid hardship.

Doctrine: A pre-need plan’s clear stipulations control literally. Delayed notice that preempts the provider’s sole arrangement right, combined with off-plan substitution, releases the provider. Adhesion binds.

Exam trap: Sec. 3 pro-planholder construction does not rewrite clear plan terms — Gaw enforces the literal stipulation (immediate acknowledged notice, a company-chosen mortuary, and the pre-selected casket) even while calling the plan an adhesion contract.

Complements table for §1.

Historic Bar question: gap. No verbatim pre-need question appears in the 2016-2025 Bar file (search returns no memorial, plan, or RA 9829 item, since Quiz 1 reproduces only insurance-code questions). If the examiner asks the hospital-share problem, answer with the drill below.

Q: A hospital gives subscribers, their spouses, and dependents free or discounted board, procedures, and drugs as subscriber incentives. Decide whether these perks are pre-need plans or HMO contracts.

A: The perks are neither pre-need plans nor HMO contracts. They are mere shareholder incentives. The controlling rules are Sec. 4(b) of RA 9829, which requires a contract for future service, money, or benefit at actual need or agreed maturity in exchange for cash or installment amounts. EO 192 s. 2015 defines an HMO contract as pre-agreed health care services for a fixed prepaid fee over a period through a provider network. Applied here, the perks ride on stock subscription payments rather than plan consideration and promise no benefit at actual need or agreed maturity. They likewise involve no fixed prepaid fee and no provider network. The perks therefore fall outside both Sec. 4(b) and the HMO definition and stand as mere shareholder incentives.

2. Parties; Other Regulated Persons; Suspension/Revocation

“Pre-need company” refers to any corporation registered with the Commission and authorized/licensed to sell or offer to sell pre-need plans. The term “pre-need company” also refers to schools, memorial chapels, banks, nonbank financial institutions and other entities which have also been authorized/licensed to sell or offer to sell pre-need plans insofar as their pre-need activities or business are concerned.

— Sec. 4(c), RA 9829

“Planholder” refers to any natural or juridical person who purchases pre-need plans from a pre-need company for whom or for whose beneficiaries’ benefits are to be delivered, as stipulated and guaranteed by the pre-need company. The term includes the assignee, transferee and any successor-in-interest of the planholder.

— Sec. 4(d), RA 9829

“Beneficiary” refers to the person designated by the planholder as the recipient of the benefits in the pre-need plan.

— Sec. 4(e), RA 9829

“Sales counselors” refers to natural persons who are engaged in the sale of, or offer to sell, or counsel of prospective planholders for the purpose of selling, whether or not on commission basis, pre-need plans upon the authority of the pre-need company.

— Sec. 4(h), RA 9829

If the Commission is of the opinion, upon examination or other evidence, that any pre-need company is in an unsound condition, or that it has failed to comply with the provisions of law or regulations, or that its condition or method of business is such as to render its proceedings hazardous to the public or to its planholders, or that its paid-up capital stock is impaired or deficient, the Commission is authorized to suspend or revoke all certificates of authority granted to such pre-need company, its officers and agents, after due notice or hearing. No new business shall thereafter be done by such company or for such company by its agent in the Philippines.

— Sec. 48, par. 1, RA 9829

The Commission may not lift the order of suspension or revocation of the said authority until the concerned pre-need company shall have submitted a viable business plan showing the company’s estimated receipts and disbursements, as well as the basis therefor for the next succeeding three (3) years.

— Sec. 48, par. 2, RA 9829

Distinction table: party vs regulated non-party.

Historic Bar question: gap for §2. Use the drill below.

Q: A company offers pension plans online with bank-deposit payment instructions but holds no license. Decide whether the offer is actionable.

A: The online offer is actionable, and a cease-and-desist order against it is proper. The controlling rules are Sec. 10, which bars operation as a pre-need company without a Commission license. Sec. 18 requires prior Commission approval of advertising. Sec. 53(c) fines unauthorized sales on a 30%/40%/license-loss ladder. Sec. 54(a)-(b) punishes unregistered selling with one (1) year of imprisonment and triple-price fines. Applied here, the Primamanila-pattern facts — a website offer of pension plans with bank-deposit payments and no license — breach both the licensing gate and the advertising gate. The Commission may therefore issue a cease-and-desist order, and fines plus criminal exposure attach.

3. Kinds of Plans; Pre-need Contract and Interpretation

“Scheduled benefit plans” refers to plans the date of availment of the benefits of which is set at the inception or purchase of the plan.

— Sec. 4(q), RA 9829

“Contingent benefit plans” refers to plans the timing of the provision of the benefits of which is conditional on the occurrence of the contingency.

— Sec. 4(r), RA 9829

All forms, including amendments thereto, relating to the pre-need plans shall be approved by the Commission. No pre-need contracts or certificates shall be issued or delivered within the Philippines unless in the form previously approved by the Commission.

— Sec. 17, RA 9829

Distinction table: lapsed vs cancelled vs in-force.

Distinction table: scheduled vs contingent (drives Sec. 26 clocks).

Historic Bar question: gap for §3. Use the drill below.

Q: After a planholder’s mother dies, the family at once engages an outside funeral home that embalms the body and supplies a casket, notifies the provider only that evening, and later substitutes a different casket. Decide whether the provider owes memorial services.

A: The provider owes no memorial services, and the dismissal of the claim stands. The controlling rules are that the plan is the law between the parties so its clear stipulations control literally, and that Sec. 3 liberality for the planholder cannot rewrite those stipulations. Applied here, the sole-and-exclusive arrangement right and the imperative acknowledged-notice requirement were preempted by the evening notice after embalming and casketing, and the pre-selected-casket term was breached by the upgrade whose cost falls on the family alone. There is therefore no liability for refusing the services, and the CA dismissal stands.

4. Registration/Disclosure; Consideration

Within a period of forty-five (45) days after the grant of a license to do business as a pre-need company, and for every pre-need plan which the pre-need company intends to offer for sale to the public, the pre-need company shall file with the Commission a registration statement for the sale of pre-need plans pursuant to this Code.

— Sec. 14, RA 9829

Pre-need plans shall be advertised and sold in an appropriate non-misleading manner in accordance with the rules to be prescribed by the Commission. It shall be unlawful for any pre-need company to advertise itself or its pre-need plans unless the Commission has approved such advertising material. The Commission shall have a period of ten (10) working days to approve or deny the advertising material and failure to act within the said period shall cause the advertising material to be approved.

— Sec. 18, pars. 1-2, RA 9829

No registered pre-need plan shall be sold to prospective planholders unless an information brochure, which has been filed with the Commission, has been provided to the purchaser.

— Sec. 19, par. 1, RA 9829

The pre-need company must provide in all contracts issued to planholders a grace period of at least sixty (60) days within which to pay accrued installments, counted from the due date of the first unpaid installment. Nonpayment of a plan within the grace period shall render the plan a lapsed plan. Any payment by the planholder after the grace period shall be reimbursed forthwith, unless the planholder duly reinstates the plan. The planholder shall be allowed a period of not less than two (2) years from the lapse of the grace period or a longer period as provided in the contract within which to reinstate his plan. No cancellation of plans shall be made by the issuer during such period when reinstatement may be effected.

— Sec. 23, par. 1, RA 9829

Within thirty (30) days from the expiration of the grace period and within thirty (30) days from the expiration of the reinstatement period, which is two (2) years from the lapse of the grace period, the pre-need company shall give written notice to the planholder that his plan will be cancelled if not reinstated within two (2) years. Failure to give either of the required notices shall preclude the pre-need company from treating the plans as cancelled.

— Sec. 23, par. 2, RA 9829

Distinction table: grace period vs reinstatement period vs notices.

Historic Bar question: gap for §4. Use the drill below.

Q: A planholder misses six months of installments after receiving only one notice, and the company cancels the plan. Decide whether the cancellation is valid.

A: The cancellation is invalid, and the company must accept reinstatement or reimburse the late payments. The controlling rule is Sec. 23, which requires a 60-day grace period, a 2-year reinstatement window from grace lapse with no cancellation inside it, and two written 30-day notices — one after grace expiry and one after reinstatement-period expiry. Applied here, six months of nonpayment still falls inside the reinstatement window, and a single notice fails the two-notice rule. Cancellation is therefore barred until the window closes with both notices given. The company must accept reinstatement or reimburse.

5. Termination (by Planholder; by Company)

A planholder may terminate his pre-need plan at any time by giving written notice to the issuer.

— Sec. 24, par. 1, RA 9829

A pre-need plan shall contain a schedule of termination values to which the planholder is entitled to upon termination. Such schedule of termination value shall be required for all in-force pre-need plans and shall be fair, equitable and in compliance with the Commission issuances. The termination value of the pre-need plan shall be predetermined by the actuary of the pre-need company upon application for registration of the pre-need plans with the Commission and shall be disclosed in the contract.

— Sec. 24, par. 2, RA 9829

Historic Bar question: gap for §5. Use the drill below.

Q: A pre-need company offers to buy out plans at 120 percent of termination value without Commission approval, and some planholders object. Decide whether the offer may proceed.

A: The offer cannot proceed as to the objecting planholders without Commission approval. The controlling rule is Sec. 24, which requires a fair, equitable, Commission-compliant termination-value schedule predetermined by the actuary and disclosed in the contract, and which allows a company above-value offer without prior approval only where the consideration is below the plan’s pre-need reserves, the planholder accepts, and non-availing planholders are not prejudiced. Applied here, the objectors defeat both the acceptance and non-prejudice conditions, and below-reserves proof is still required. The offer therefore cannot proceed as to objectors and must be routed through Commission approval.

6. Claims Settlement; Unfair Claims Settlement

In the case of scheduled benefit plans, the proceeds of the plan shall be paid immediately upon maturity of the contract, unless such proceeds are made payable in installments or as an annuity, in which case the installments or annuities shall be paid as they become due. Refusal or failure to pay the claim within fifteen (15) days from maturity or due date will entitle the beneficiary to collect interest on the proceeds of the plan for the duration of the delay at the rate twice the legal interest unless such failure or refusal to pay is based on the ground that the claim is fraudulent: Provided, That the planholder has duly complied with the documentary requirements of the pre-need company.

— Sec. 26, par. 1, RA 9829

In the case of contingent benefit plans, the benefits shall be paid by the pre-need company thirty (30) days upon submission of all necessary documents.

— Sec. 26, par. 2, RA 9829

In case of any litigation for the enforcement of any pre-need plan, it shall be the duty of the Commission to determine whether the payment of the claim of the planholder has been unreasonably denied or withheld. If found to have unreasonably denied or withheld the claim, the pre-need company shall be liable to pay damages, consisting of actual damages, attorney’s fees and legal interest, to be computed from the date the claim is made until it is fully satisfied: Provided, That the failure to pay any such claim within the time prescribed in Section 26 hereof shall be considered prima facie evidence of unreasonable delay in payment.

— Sec. 28, RA 9829

Distinction table: Sec. 25 vs Sec. 28.

Distinction table: scheduled vs contingent payment.

Historic Bar question: gap for §6. Use the drill below.

Q: A matured education plan pays 60 days late without any fraud. State what the beneficiary collects.

A: The beneficiary collects twice-legal-interest for the delay period plus Sec. 28 damages on suit. The controlling rules are Sec. 26, which prices scheduled-plan delay at twice legal interest from day 16 where the planholder complied with documents. Sec. 28 imposes actual damages, attorney’s fees, and legal interest from claim date on unreasonable withholding, with a missed Sec. 26 clock as prima facie proof of unreasonable delay. Applied here, the 60-day delay yields 45 days of delay interest, and the missed clock supplies the prima facie case for litigation damages if unreasonableness is found. The beneficiary therefore recovers twice-legal-interest for the delay period plus Sec. 28 damages on a successful suit.

7. Trust Fund; Regulation of Companies; Companies in Distress

To ensure the delivery of the guaranteed benefits and services provided under a pre-need plan contract, a trust fund per pre-need plan category shall be established. A portion of the installment payment collected shall be deposited by the pre-need company in the trust fund, the amount of which will be as determined by the actuary based on the viability study of the pre-need plan approved by the Commission. Assets in the trust fund shall at all times remain for the sole benefit of the planholders. At no time shall any part of the trust fund be used for or diverted to any purpose other than for the exclusive benefit of the planholders. In no case shall the trust fund assets be used to satisfy claims of other creditors of the pre-need company. The provision of any law to the contrary notwithstanding, in case of insolvency of the pre-need company, the general creditors shall not be entitled to the trust fund.

— Sec. 30, par. 1, RA 9829

Except for the payment of the cost of benefits or services, the termination values payable to the planholders, the insurance premium payments for insurance-funded benefits of memorial life plans and other costs necessary to ensure the delivery of benefits or services to planholders, no withdrawal shall be made from the trust fund unless approved by the Commission. The benefits received by the planholders shall be exempt from all taxes and the trust fund shall not be held liable for attachment, garnishment, levy or seizure by or under any legal or equitable processes except to pay for the debt of the planholder to the benefit plan or that arising from criminal liability imposed in a criminal action.

— Sec. 30, par. 2, RA 9829

The trust fund shall at all times be sufficient to cover the required pre-need reserve.

— Sec. 30, par. 3, RA 9829

The pre-need company shall make monthly deposits to the trust fund in an amount determined by the accredited actuary, sufficient to pay the benefits promised under the contract. For plans paid for in full, the pre-need company shall deposit into the trust fund at least forty-five percent (45%) for life plans and fifty-one percent (51%) for education and pension plans of said full payment or such higher amount as determine by the actuary.

— Sec. 31(a), par. 1, RA 9829

The trustee shall at all times maintain a liquidity reserve which shall be sufficient to cover at least fifteen percent (15%) of the trust fund but in no case less than one hundred twenty-five percent (125%) of the amount of the availing plans for the succeeding year.

— Sec. 37, par. 1, RA 9829

Whenever, upon examination or other evidence, it shall be disclosed that the condition of any pre-need company is one of insolvency, or that its continuance in business would be hazardous to its planholders and creditors, the Commission shall forthwith order the company to cease and desist from transacting business and shall designate a receiver to immediately take charge of its trust fund, assets and liabilities, as expeditiously as possible collect and gather all the assets and administer the same for the benefit of its planholders and creditors, and exercise all the powers necessary for these purposes including, but not limited to, bringing suits and foreclosing mortgages in the name of the pre-need company.

— Sec. 50, par. 1, RA 9829

The Commission shall have the primary and exclusive power to adjudicate any and all claims involving pre-need plans. If the amount of benefits does not exceed One hundred thousand pesos (P100,000.00), the decision of the Commission shall be final and executory.

— Sec. 55, RA 9829

Any person aggrieved by an order or decision of the Commission, whether in relation to its settlement of a claim of a planholder or in the exercise of its regulatory authority, may appeal the order or decision to the Court of Appeals by petition for review in accordance with the pertinent provisions of the Rules of Court.

— Sec. 56, RA 9829

Case: SEC v. Laigo (Legacy Consolidated Plans), G.R. No. 188689, Sept. 2, 2015 (book-cited)

Facts (as discussed in Aquino 2024): Legacy bound itself in trust recitals to manage collections for the benefit and account of planholders through LBP as trustee. On distress the question was whether the company or the planholders owned the fund.

Issue: The issue was whether the trust fund belonged to the company or to the planholders on the company’s distress.

Held (as discussed): the manifest intention makes planholders the beneficiaries. Beneficial ownership lies in planholders, legal ownership lies in the trustee, and none is left in the trustor. Sec. 16’s spirit (now Sec. 30’s letter) makes planholders exclusive beneficiaries, a design RA 9829 cemented after the industry chaos.

Doctrine: trust-fund assets answer only to planholders, never to the company or its general creditors.

Exam trap: Laigo predates full RA 9829 litigation but states the Sec. 30 rule — cite Sec. 30 as the controlling text, Laigo as the ownership illustration.

Distinction table: suspend vs conserve vs receive vs liquidate.

Historic Bar question: gap for §7. Use the drill below.

Q: General creditors of an insolvent pre-need company seek to attach the trust fund. Decide whether attachment lies.

A: The attachment fails, and the creditors are confined to non-fund assets. The controlling rules are Sec. 30, which bars diversion of the fund and creditor claims against it notwithstanding any contrary law. Sec. 52 excludes the fund from court insolvency jurisdiction and denies creditors personality in Commission fund proceedings. Laigo vests beneficial ownership of the fund in the planholders. Applied here, the attachment targets fund assets, the precise object of the statutory shield. Attachment therefore fails, and creditors may proceed against non-fund assets only.

Quick-Recall Tables

Definition and policy numbers.

Parties and capital.

Kinds and forms.

Registration, disclosure, consideration.

Termination and claims.

Trust fund and distress.

Exceptions-to-exceptions map.

Exam Traps

1. Sec. 4(b) needs a future benefit at need or maturity for plan payments — stockholder perks paid for shares fail both halves.
2. HMO contracts run on fixed prepaid fees through provider networks (EO 192) — different animal, now also IC-supervised but not pre-need.
3. Doubts favor the planholder (Sec. 3) but clear terms are enforced literally (Gaw) — liberality is not rewriting.
4. The Commission’s power is primary and exclusive (Sec. 5). Pending SEC cases merely continue to conclusion (Sec. 57).
5. Assignees and transferees are planholders (Sec. 4(d)) — Gaw still had to meet the assignment conditions (accelerated installments, written, approved, 25-km).
6. A counselor must be a licensed natural person with training plus exam. Lending a license to an unlicensed seller kills the license (Sec. 21(g)).
7. Affiliate control is over 25% or officer/director status — lower than the 40% insurance-holding presumption in Part I-E.
8. Lapsed (past grace) is curable. Cancelled (past 2 years unreinstated) is terminal, so classify before advising.
9. Scheduled vs contingent decides the Sec. 26 clock: immediate/15-day vs 30-days-on-documents.
10. Registration runs per plan within 45 days of licensing — company licensing alone never authorizes a sale.
11. Ads need prior approval, but 10 working days of silence means approval — calendar working days, not calendar days.
12. Both Sec. 23 notices are required. One notice or none bars cancelled treatment entirely.
13. Termination by the planholder is a right (written notice anytime). Termination by the company is a proposal needing consent plus three conditions.
14. Twice legal interest (not twice the Monetary Board ceiling of insurance Secs. 248-250) prices scheduled-plan delay — keep the regimes apart.
15. The five Sec. 25 acts each need without-just-cause, but unlike insurance Sec. 247 no business-practice frequency is stated — single acts suffice.
16. Fund deposits are not company income and cannot fund dividends or creditors (Sec. 31) — dividend lock adds the fund as item (c) (Sec. 29).
17. Full-payment floors are 45% life but 51% education-pension — the higher number belongs to the scheduled plans.
18. Remit within 20 days of each reference month. Cure noticed deficiencies in 30 days. They are two different clocks.
19. FRIA does not cover pre-need debtors (RA 10142 Sec. 5) — the Code’s own conservatorship-to-liquidation path governs.
20. Sec. 55 finality stops at P100,000.00. Above it, Sec. 56 sends any aggrieved person to the CA by petition for review.

Key Authorities Cited

Codes. RA 9829 Pre-Need Code (2009), Secs. 1-60 full-text verified. The verified range covers definitions and policy (1-5), supervision (5-6), organization and licensing (7-13), registration (14-19), counselors and agents (20-22), default and termination (23-24), claims (25-28), profits (29), trust fund (30-38), actuaries (39-40), reports (41-47), suspension (48), distress (49-52), sanctions and crimes (53-54), adjudication and review (55-56), and transitory provisions (57-60). Special laws and issuances. EO 192 s. 2015 governs HMO supervision and definition. IC Letter Opinion 2022-01 treats hospital perks as not HMO. IC Circular 2015-41 sets the Plan/Plans name. IC Circular 2016-11 carries standard provisions. IC Circular 2021-09 allows electronic form. FRIA Sec. 5 excludes pre-need debtors. The SRC was the prior regime. Cases. Gaw v. CA, G.R. No. 147748, Apr. 19, 2006, states the plan-is-law rule and is the Batch-1 No. 27 assigned digest. SEC v. Laigo, G.R. No. 188689, Sept. 2, 2015, illustrates fund ownership and is book-cited. SEC v. College Assurance Plan, G.R. Nos. 218180 and 218193, Sept. 9, 2020, confirms exclusive supervision with conservatorship and is book-cited. Primamanila Plans v. SEC, G.R. No. 193791, Aug. 6, 2014, sustains a CDO against an unlicensed website offer and is book-cited. Dio v. St. Ferdinand Memorial Park, G.R. No. 169578 (2006), holds that adhesion binds and is book-cited, with year only as the book’s day figure is an OCR-unreadable “November 80”).

Source and Verification Note

Primary text: RA 9829 pulled verbatim from the LawPhil full text Nov. 11, 2026 (repacts/ra2009/ra_9829_2009.html) into a local 75k-character extract. Every Sec. 1-60 blockquote above was checked against that extract. Figures re-verified there include Dec. 3, 2009 approval, 45-day registration, 10-working-day ad approval, 60-day grace with 2-year reinstatement and two 30-day notices, 45%/51% full-payment deposits with the 5/5-10/10-70/80 installment table, 20-day remittance, 30-day deficiency cure, 15%/125% liquidity, 120-day valuation and statements, 60-day deficiency funding, 30-day reorganization call, and P100,000.00 adjudication finality. Two LawPhil rendering notes. Sec. 18 prints the fine as “(P100, 000.00)” with a digit-space (quoted here normalized as P100,000.00 per the book’s identical figure). Sec. 4(b) prints “he determined” for “be determined” (flagged at the quote). Chapter substance. Aquino 2024 Ch. 6, pp. 440-459, was recovered by rendering PDF pages at 150 dpi with pymupdf and OCRing with rapidocr-onnxruntime (the vault textbook PDF has zero text layer across all 1,460 pages), then cross-checked section by section against the LawPhil Code text. No sentence is quoted as the book’s own. Case citations. Gaw carries the Batch-1 No. 27 syllabus docket confirmed against the assigned digest. Laigo, SEC v. CAP, Primamanila, and Dio are book-discussed supporting authorities as cited in Aquino 2024, not syllabus-assigned digests, and are labeled so in the inventory. Bar-question gap. The 2016-2025 file carries no verbatim pre-need question (Quiz 1 reproduces insurance-code questions only). Each section carries an examiner-style drill instead, labeled Q: and never as a past question. Tables carry uniform pipe counts per row with no triple-star runs, verified by script before delivery.

Revision note (prose pass). Prose cleared of semicolon phrase-chains outside tables, verbatim blockquotes, and structural headings. Gaw kept as a short digest with complete-sentence Facts, Issue, Held, and Doctrine paragraphs. Laigo kept as a short digest with an Issue sentence drawn from its Facts line and complete-sentence Facts and Held paragraphs. All seven drafted Q stems wrapped in bold. No historic year-labeled questions in the file so no year was invented. No doctrine, dates, dockets, or holdings were changed.