PRE-NEED companies are supposed to anticipate contingencies. But the College Assurance Plan, Inc. (CAP), one of the largest pre-need companies in the country, ironically, is in an emergency itself. Earlier this year, CAP, because of cash-flow problems, was not able to renew its contract with UST, making its subscribers trip over bother land.

This semester, P3.4 million worth of checks from CAP to the University bounced. The checks, valued at around P25,000 per student, are the new financial instrument the company issued to pay to about 3,500 Thomasian plan-holders. The University of the Philippines and UST are the only universities that turned down CAP’s application for a new contract, having doubts on the company’s ability to pay.

Barely a year ago, it was reported that CAP was closing down because of financial troubles. From 2005 to 2030, subscribers’ plans will mature, putting the company’s anticipated overheads to a lofty P26.4 billion, against its present P8.6 billion trust fund. In short, CAP is lacking the needed financial backbone that will support its growing beneficiaries.

Aside from the lengthy liquidation per scholar, which takes about five to seven office days, CAP obliged its subscribers to process their own papers before enrolment to receive their checks on time.

After long hours on the queue, plan-holders will have to wait for days and have to endure persistent headache and hypertension since CAP, “the largest educational plan provider,” also provides the most problematic pre-paid educational plan. With almost 500,000 beneficiaries, about 90,000 of them presently enrolled, how can the company meet its semestral obligation?

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Lucky for us Thomasians, UST still understands the situation. Students were not fined for the checks that bounced and were not stricken off the list. The University also provided a temporary financial scheme enabling troubled parents to enroll their children having problems with the company.

With these issues, the Senate was provoked to put up a committee that will address pre-need companies’ failure to meet its plan-holders interests and demands. Also, the committee will focus on evaluating the Securities and Exchange Commission’s role in regulating companies providing financial and other institutional funds, like CAP.

As of now, students under CAP scholarship still try to cope with the hassle. After diligently paying the company for years, distressed plan-holders again would have to endure all the anxiety and hypertension before the problem clears up. As for UST, it should perhaps work mutually with CAP to develop flexible agreements that would benefit both parties until the said issues settle. After all, Thomasians are the biggest CAP plan-holders, comprising about 10 per cent of the University’s population.

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