In an Executive Order (EO) signed 12 November 2015, President Benigno S. Aquino III transferred the regulation and supervision over Health Maintenance Organizations (HMOs) from the Department of Health (DOH) to the Insurance Commission (IC).
The EO, numbered 192, transferred regulatory and supervisory capacities of the DOH to IC, covering establishment, operations, and financial activities of HMOs. The IC shall be responsible for the rules and guidelines on establishment of HMOs (e.g., minimum capitalization) as well as licensing and registration. The IC will also oversee the solvency of HMOs and the prevention of fraud and other deceptive practices of the industry.
Insurance Commissioner Emmanuel F. Dooc said, “The Insurance Commission is ready to take on this transfer of responsibility. We have championed good corporate governance among insurance companies for the benefit of everyday Filipinos availing of insurance products. We have promoted the solvency and stability of the insurance and pre-need industries to protect the interests of the consumers. We intend to apply the same principles in regulating HMOs.”
Its rationale draws from the premise that insurance companies, pre-need companies, and HMOs function under a common concept of receiving compensation, either through premiums or contributions, and promising certain contractual benefits for the future.
The EO streamlines and consolidates functions related to the regulation of HMOs, eliminating redundancy and simplifying the organizational structure of the executive department.
The transfer was also meant to improve accessibility and accountability, as well as to provide more efficient use of specialized expertise—saving on administrative costs and promote sharing of best practices.
Moving forward, the IC is charged with issuing Licenses to Operate but will honor Clearances to Operate issued by the DOH before the EO is implemented. All issues related to medical matters shall be referred to the DOH.
The EO spelled out administrative arrangements the IC and the DOH must take to manage the transition. Further, an oversight committee composed of the Secretary of Finance, the Secretary of Health, and the Insurance Commissioner will be created and exist until 30 June 2016 to ensure the effective transition.
Finance Secretary Cesar V. Purisima welcomed the transfer, saying, “It is important that government grows leaner and more agile, the better to efficiently deliver on regulatory functions for our people.
This is another step forward in our bid to deepen good governance in both the private and public sectors—I expect the Insurance Commission to continue strengthening their regulatory capacity.”
