THE INSURANCE Commission (IC) issued a cease and desist order against health maintenance organization (HMO) Caritas Health Shield, Inc. due to alleged fraudulent card swiping and misrepresentation of sales agents.

In a statement sent to reporters on Wednesday, the IC said it issued a cease and desist order against Caritas Health Shield dated July 8, banning the HMO from selling new products or transacting new business.

Insurance Commissioner Dennis B. Funa said the regulatory body earlier required Caritas Health Shield to show why it should not be ordered to stop accepting clients following reports of “fraudulent swiping of credit/debit cards” and “misrepresentations of the company’s sales agents.”

However, the IC was unconvinced by the explanation given by the firm, saying Caritas Health Shield “acknowledged that there have been instances of unauthorized swiping and misrepresentations committed by its sales agents.”

“[T]he Commission’s continuing receipt of numerous complaints against Caritas Health from the general public demonstrates the prima facie inadequacy and unresponsiveness of the company’s action plans,” Mr. Funa said.

The IC chief added that the main problems under the circumstances are the “unethical conduct” of Caritas Health’s erring agents and sales associates as well as the “apparent lack of timely and effective” intervention by its management.

Under Section 4(e) of Executive Order No. 192, series of 2015 signed by former President Benigno S.C. Aquino III, the regulatory agency is empowered to “issue orders to prevent fraud and injury to the HMO plan holders and industry stakeholders.”

“It will be utterly preposterous and a patent disservice to the general public and the HMO industry if this Commission will sit idly by and wait until more complaints are reported before taking action,” Mr. Funa said.

Despite the ban on selling new HMO products, the IC directed Caritas Health Shield to continue servicing its existing clients and to provide uninterrupted service.

Mr. Funa will also deploy an overseer to ensure the HMO’s compliance with the order.

To recall, the Insurance Commission issued a show-cause order against Caritas Health in 2017 on the same issues involving its sales agents. — K.A.N. Vidal