Insurance Commission orders Caritas Health Shield to stop selling new HMO products

The Insurance Commission (IC) said Wednesday it has ordered Caritas Health Shield Inc. to stop the sale of new health maintenance organization (HMO) products.

In a statement, the IC said Insurance Commissioner Dennis Funa has issued a cease and desist order against Caritas Health, ordering it to stop selling new HMO products and/or transacting new HMO business.

“The issuance of the Cease and Desist Order was prompted by the numerous complaints received by the Commission on the alleged fraudulent swiping of credit/debit cards and alleged misrepresentations of the company’s sales agents,” the IC said.

Caritas Health declined to make a statement as of this posting other than saying it was still trying to very if indeed the commission issued a cease and desist order against it.

The commission noted that Funa earlier required Caritas Health to show cause why it should not be ordered to stop selling new HMO products and/or transacting new HMO business.

“According to the explanation of Caritas Health to the Commission, the company had already instituted and implemented various action plans to address said instances of unauthorized swiping of credit or debit cards and misrepresentations,” it said.

“Unconvinced by the explanation given by Caritas Health and noting that the company acknowledged that there have been instances of unauthorized swiping and misrepresentations committed by its sales agents, Commissioner Funa proceeded with the issuance of the Cease and Desist Order dated July 8, 2019,” it added.

Funa has noted that the IC’s continuous receipt of numerous complaints against Caritas Health from the general public demonstrates the “prima facie” inadequacy and unresponsiveness of the company’s action plans.

“It should be stressed that the use of credit and/or debit cards as a mode for payment is not the main problem under the circumstances, but the unethical conduct of CHSI’s erring agents/sales associates as well as the apparent lack of timely and effective supervisory intervention by CHSI management,” he said.

“As this Commission is empowered under Section 4 (e) of Executive Order No. 192, series of 2015, to ‘issue orders to prevent fraud and injury to the HMO plan holders and industry stakeholders,’ this Commission is not precluded from enforcing prompt corrective regulatory action and addressing CHSI’s problem with its unscrupulous agents/sales associates at this juncture before it progresses into an uncontrollable state. 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,” he said.

The IC said Funa has directed Caritas Health to continue servicing its existing HMO contracts with its members and to provide uninterrupted conduct of servicing activities.

“In the interest of the protection of the general public, I directed Caritas Health to continue servicing its existing HMO contracts with its members,” he said.

To ensure Caritas Health’s compliance with this order, Funa will be appointing an overseer, according to the IC.

“This is not the first time that Caritas Health was made to explain the allegations against the conduct of its sales agents. In 2017, the Insurance Commission had previously issued a show-cause order against Caritas Health on the same issues in regard to its sales agents,” it said. —KG/VDS, GMA News