MANILA - The Securities and Exchange Commission (SEC) has issued a new order requiring pre-need companies to plug trust fund deficiencies within 15 to 30 days from August 3, the date of the order's effectivity.

In a memorandum circular, the SEC said pre-need companies with trust fund deficiency of below 15% have 30 days to address the deficit while those with more than 15% will be given 15 days to cover half of it.

The SEC has threatened to suspend the license of any firm which will not be able to comply with the requirements.

The regulator has been tightening its supervision over the pre-need industry after the collapse of several of its players because of the global financial crisis.

Last month, it issued a directive requiring pre-need firms to increase their minimum deposit in the industry trust fund to ensure the delivery of benefits to plan holders.

As of end-June 2008, the trust fund deficiency of pre-need firms totaled P46.83 billion, compared to a P6.8-billion surplus in 2007, due to shrinking earnings from investments.

There are currently 22 companies licensed to sell pre-need policies.