IC issues show cause order vs Caritas Health

MANILA, Philippines - The Insurance Commission (IC) said it has issued a show cause order against health maintenance organization (HMO) Caritas Health Shield Inc. due to alleged fraudulent swiping of credit and debit cards.

Insurance Commissioner Dennis Funa issued the order, instructing Caritas Health Shield to explain the series of complaints against the company regarding the alleged scam done by its agents to mislead victims into buying HMO products.

“Any marketing activity which misleads or tends to mislead consumers into buying HMO products without proper disclosure of the transaction is not tolerated by the Insurance Commission,” Funa said in a statement.

Based on the complaints filed before the IC, agents of the HMO would resort to different marketing strategies, including offering freebies, in order to entice individuals to surrender their credit or debit card, without disclosing that the card will be used to enroll them as a member of Caritas and to pay for the premiums.

The complainants claimed that it was never their intention to purchase any HMO products, and requested for the cancellation of their contracts and the refund of the money charged against their credit or debit cards.

Under the show cause order, the IC also ordered Caritas Health Shield to cease and desist from engaging in the activity complained of pending the conduct of an investigation.

Funa said the investigation on the matter has been led by the IC instead of the Association of Health Maintenance Organizations of the Philippines Inc. (AHMOPI) due to the number of complaints filed against the firm.

“Under present regulations, all complaints filed against HMO received by the IC will be endorsed to the grievance machinery of the AHMOPI, an umbrella organization of HMO,” the commissioner said.

“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,” he said.

Funa said all regulated entities of the IC should “first and foremost observe and safeguard the interest and welfare of the public.”

According to the IC, Caritas Health Shied is the parent company of life insurance firm Caritas Life Insurance Co. and pre-need firm Caritas Financial Plans Inc., among others.

It was established in 1995 and is primarily engaged in the business of developing, maintaining, arranging for and promoting comprehensive medical and health maintenance services.

Earlier, the Securities and Exchange Commission (SEC) has also ordered the company to change or modify its corporate name due to its similarity to Caritas Manila, the leading social arm of the Archdiocese of Manila.

Under Executive Order 192, series of 2015, the jurisdiction over HMO was transferred from the Department of Health to the Insurance Commission.

Since then, the IC has issued regulations on HMOs, including the required minimum capitalization, net worth, reserve fund and security deposit requirements, and the approval of HMO products and forms.