IC formally raises HMO capital requirement

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The Insurance Commission (IC) on Friday formally signed the circular that requires all health maintenance organizations (HMOs) to have a minimum paid-up capital of at least P10 million for existing HMOs and P100 million for new players.

An HMO is a prepaid health-care service provider offering comprehensive coverage to its members through partnerships with hospitals and other health professionals.

HMOs have been placed under the watch of the IC, moved from the jurisdiction of the Department of Health (DOH) with the signing of Executive Order 192 in November last year.

Under the Order, the regulatory and supervisory capacities of the DOH were transferred to the IC, covering the establishment, operations and financial activities of HMOs.


All existing HMOs must have a minimum paid-up capital of at least P10 million. These existing HMOs were the ones who obtained their licenses from the previous regulator, the DOH, and those who renewed their license with the IC in December 2015.

Meanwhile, new HMOs must have a minimum paid-up capital of P100 million before obtaining a license to operate in the Philippines.

At present, there are a total 28 HMOs operating now in the country, 15 which existed before the transfer from the DOH and 13 newly licensed.

The Circular also said that community-based and cooperative HMOs are required to maintain a paid-up capital equivalent to 50 percent of what is prescribed for regular HMO.

“In case of foreign HMO applying for an HMO branch license, no license shall be issued unless the branch has a statutory deposit of an amount of at least One Hundred Million Pesos (P100,000,000) in cash and/or allowable securities approved by the Insurance Commissioner,” it stated.

The Commission may increase the minimum paid-up capital and net worth requirement to an amount that, in its opinion, would reasonably assure the safety and the interests of the HMO members and the public, the Circular stressed.

The circular will take effect 15 days after its signing, or on August 6.

Earlier this week, the insurance regulator said it would push for a bill that establishes sufficient guidelines on how to administer and govern the HMO industry.

Insurance Commissioner Emmanuel Dooc said that the regulator would seek the support of the Department of Finance (DOF) in crafting a bill that will bind IC’s administrative issuances over HMOs.

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