THE Insurance Commission (IC) said while majority of health maintenance organizations (HMOs) will be able to comply with the proposed revised minimum capitalization requirement for the industry, around seven companies are currently unable to do so.
Insurance Commissioner Reynaldo Regalado told reporters on the sidelines of the Philippine Life Insurance Association’s anniversary celebration in Makati that while most HMOs would be able to meet the proposed increase in paid-up capital, a draft circular letter on the revised minimum capitalization, financial capacity and other regulatory requirements for HMOs is being reviewed as part of risk management.
“I cannot risk the money and the trust of our public on HMOs,” Regalado said.
“Majority would be compliant. They don’t need to agree (with the proposal) because they’re already there. What I recall is seven will be affected,” Regalado said.
“I think it’s high time that we really look at it seriously. Because our government is very serious on providing health,” he added.
Since the circular is still a draft, Regalado said the agency is still taking into consideration concerns involving the stakeholders, particularly HMOs that will be affected.
“Maybe what we can do, we can also limit the number of those who have lower capitalization. It’s an open thing. We want to be democratic on how we’re supposed to do this,” Regalado said.
Another option, Regalado said, would be for some of the affected companies to merge.
At present, existing domestic HMOs must have a minimum paid-up capital of at least P10 million.
The draft circular letter states that no domestic HMO shall engage in the business of HMO in the Philippines unless it meets the minimum capital requirement of P50 million for existing HMOs and P100 million for new HMOs by year-end.
This is proposed to increase to P100 million for all HMOs by end-2025, P200 million by end-2028, P350 million by end-2031 and P500 million for all HMOs by end-2034.
