CONGRESS is partly to blame for the pre-need industry?s woes?particularly those offering educational plans?because it failed to heed their plea for a law limiting tuition increases, an official said yesterday.

Many pre-need firms started sinking when the government removed the cap on tuition increases, and mainly because they set their premiums on the assumption the government would continue to limit those increases, Senate President Juan Ponce Enrile told radio station dzBB.

He said many of those companies faced collapse unless the government came to their rescue.

?When the limitations on the tuition fee increases were lifted, the pre-need companies were not informed beforehand, Enrile said.

?Their financial obligations ballooned. Consequently, many of them have gone bankrupt.?

Enrile said the leaders of the pre-need industry were correct in arguing that the government should be faulted for their troubles.

?There used to be a government regulation on increasing tuition fees, but Congress rejected the proposal to limit tuition free increases, he said.

?This wrecked the actuarial computation of their investments in relation to their obligations to their plan holders.?

Leaders of the pre-need industry also blame banks for their troubles. They say banks manage their trust funds, but those funds have not been generating the assumed return on investment of 12 percent.

Official data show that the pre-need industry reported a P46.8 billion deficit in the year to June 2008, compared with a P6.8-billion surplus at the end of 2007.

Enrile, a lawyer who specialized in corporate law, said the government had also been lax in supervising pre-need firms, especially with regard to monitoring their investments.

A bill approved by the Senate has transferred the responsibility of supervising pre-need firms to the Insurance Commission from the Securities and Exchange Commission. That same bill is awaiting approval by the House of Representatives.

Enrile said the Senate would give priority to investigating the condition of the pre-need industry, which is being initiated by the committee on trade and commerce led by Senator Mar Roxas. Fel V. Maragay