Revised Requirements on Reserving and Liability Recognition of Pre-need Companies Covering Their AFS

April 20, 2007SEC NOTICENotice is hereby given that the Commission En Banc in its meeting of April 19, 2007, resolved to adopt the following revised requirements on reserving and liability recognition of pre-need companies covering their audited financial statements (AFS) for the period ended December 31, 2006: ASCTac(a) The net asset value in the trust fund shall be equal to the required Pre-need Reserves computed pursuant to the method prescribed herein;(b) Pre-need Reserves (PNR) shall be set up for all pre-need benefits guaranteed and payable by the pre-need company as defined in the pre-need plan contracts;(c) In recognizing PNR, the general requirements of PAS 37 on provisioning and the specific methodology provided under this item shall be complied with by the company;(d) The amount recognized as a provision to cover the PNR shall be the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The risks and uncertainties that inevitably surround many events and circumstances shall be taken into account in reaching the best estimate of a provision;(e) ...