The Insurance commission (IC) has issued a show-cause order against health-maintenance organization (HMO) Caritas Health Shield mandating the resolution of numerous complaints filed against it on alleged fraudulent swiping of credit and debit cards.
According to Insurance Commissioner Dennis B. Funa, Caritas Health Shield was told to explain why agents resorted to different marketing strategies, including the offering of freebies, to entice individuals to surrender his or her credit or debit card without disclosing that the card will be used to enroll him or her as member of Caritas Health Shield and pay the premium.
“Any marketing activity that misleads or tends to mislead consumers into buying HMO products without proper disclosure of the transaction is not tolerated by the IC,” Funa said.
The regulator said the complainants claimed it was never their intention to purchase any HMO product and, thus, requested for the cancellation of their contracts and the return of premium paid and charged through their credit or debit cards.
“Under present regulations, all complaints filed against HMOs received by the IC will be endorsed to the grievance machinery of the Association of Health Maintenance Organizations of the Philippines Inc., an umbrella organization of HMOs,” Funa said.
In the IC-issued show-cause order, Caritas Health Shield was ordered to cease and desist from engaging in the activity raised against it pending the conduct of an investigation.
“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,” Funa added.
He emphasized all IC-regulated entities should first and foremost observe and safeguard the interest and welfare of the public.
The jurisdiction over HMOs was transferred from the Department of Health (DOH) to the IC by virtue of Executive Order 192 issued in 2015.
Since assuming jurisdiction, the IC has been issuing regulations on such matters as minimum capitalization, net worth, reserve fund and security deposits, as well as approval of HMO products and forms.
Caritas Health Shield was established in 1995 and primarily engaged in the business of developing, maintaining, arranging for and promoting comprehensive medical and health maintenance services.
It is the parent company of Caritas Life Insurance Co., a life-insurance company, and Caritas Financial Plans Inc., a preneed company, among others.
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