IC issues show-cause order vs Caritas Health Shield

Posted on June 16, 2017

THE Insurance Commission (IC) has formally issued a show-cause order versus Caritas Health Shield after receiving a number of customer complaints alleging fraudulent acts by the health maintenance organization (HMO). In a statement on Thursday, the insurance regulator said it ordered Caritas Health Shield to address the 117 complaints filed by customers alleging that the company engaged in fraudulent swiping of their credit and debit cards.

The complainants claimed they had no intention of purchasing HMO products from Caritas Health Shield, and requested cancellation of their contracts and the return of their premiums that were charged on their credit and debit cards.“In the show cause order issued by the IC, Caritas Health Shield was ordered to cease and desist from engaging in the activity complained of pending the conduct of an investigation,” the IC stated.

Insurance Commissioner Dennis B. Funa said that under the current regulations, all complaints filed against HMOs received by the IC will be endorsed to the Association of Health Maintenance Organizations of the Philippines, Inc. (AHMOPI).The only existing association of HMOs has nine members, including Caritas Health Shield, out of the 23 HMOs registered with the Securities and Exchange Commission.

“However, due to the number of complaints against Caritas Health Shield and the serious nature thereof, we issued an order against the company requiring it to answer all allegations of fraud and misrepresentation and why no administrative sanction shall be imposed against the company,” Mr. Funa added.

Executive Order (EO) 192 signed by former President Benigno S. C. Aquino III on Nov. 12, 2015 transferred the supervision of HMOs to the insurance regulator from the Department of Health “in order to regulate and supervise the establishment, operations and financial activities of HMOs.”

An HMO is a prepaid health-care service provider offering comprehensive coverage to its members through partnerships with hospitals and other health professionals.

It operates on the idea of risk-sharing, with the objective of minimizing a member’s financial burden of by covering the costs of medical services availed from partners through the HMO’s common fund.

Sought for comment, Caritas Health Shield President and Chief Executive Officer Ronnie U. Collado in a phone interview said: “We are fair, we are an honest company... We built this company in an honest way... We have been in the business for 22 years.”

Mr. Collado said the IC’s show cause order claimed there are 117 complaints against the company, but they only know of nine complaints of fraudulent swiping of credit and debit cards. He noted half of the nine cases were filed last year, while the rest were filed three months ago.

According to the Caritas Health Shield chief, the company started with more than half a million or 700,000 policyholders. At present, Mr. Collado said the company has around 500,000 as some policies were terminated since they offer five- and 10-year plans.

Caritas Health Shield was established in 1995 and is primarily engaged in the business of developing, maintaining, arranging for and promoting comprehensive medical and health maintenance services. It is likewise the parent company of Caritas Life Insurance Company -- a life insurance company, and Caritas Financial Plans, Inc. -- a pre-need company, among others. -- Janine Marie D. Soliman