Philippine Insurance Commission places Forticare under conservatorship
Philippine Insurance Commission places Forticare under conservatorship | Insurance Business Asia
Life & Health
Philippine Insurance Commission places Forticare under conservatorship
Regulatory non-compliance highlighted
Life & Health
By
Roxanne Libatique
The Philippine Insurance Commission (IC) has placed Forticare Health Systems International Inc under conservatorship due to the company’s failure to comply with regulatory requirements.
The IC announced that this measure would allow the regulator to oversee the management of the health maintenance organisation (HMO) until its financial health can be re-established.
The IC did not disclose the specific financial shortcomings that led to this decision. However, under existing regulations, the commission can place an HMO under conservatorship if the company shows a continuous inability or unwillingness to meet its obligations to policyholders.
Recent data from the IC showed that Forticare posted a net loss of under PHP10,000 during the first quarter of 2024. During the same period, the company’s healthcare benefits and claims totalled PHP1.67 million. Forticare’s total assets were reported at PHP116.18 million, and its capital stock was at PHP104.2 million, which is significantly above the minimum requirement of PHP10 million.
Forticare, established in 2019, is registered with the Securities and Exchange Commission and the Bureau of Internal Revenue.
This move follows the guidelines set out in Executive Order No. 192 s. 2015 and IC Circular Letter No. 2019-35, which regulate HMOs.
Attorney Erwin C. Onglengco has been appointed as Carehealth’s receiver.
According to Onglengco’s evaluation, Carehealth is dealing with significant liquidity problems, which have caused delays in fulfilling its financial commitments. As a result, the IC has suspended all claim payments as of June 27.
The IC’s directives include halting all actions or proceedings to enforce claims against Carehealth, prohibiting the disposal of assets without approval except in the ordinary course of business, and suspending the payment of liabilities except for necessary administrative expenses.
Additionally, the commission has halted the initiation of legal actions against Carehealth to avoid unnecessary litigation costs.
The Stay Order aims to preserve Carehealth’s assets and protect its stakeholders. This order will be posted at the IC and at the entrance of Carehealth’s office and published in a newspaper of general circulation for three consecutive weeks, as mandated by Circular Letter No. 2016-34 dated June 21, 2016. The order will remain in effect until Carehealth’s liquidity is restored or the company enters liquidation.
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