IC to set P100M capital for HMOs

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Regulators will impose a minimum paid-up capital of P100 million for new Health Maintenance Organization (HMOs) players that want to operate in the country.

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 Insurance Commission (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.


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

Insurance Commissioner Emmanuel Dooc said the agency recently posted the draft memorandum circular on the paid-up capital detailing the minimum capitalization and financial capacity for HMOs to the IC website.

“We have also delivered hard copies to the players. We have given them the deadline to provide us with comments not later than April 28. After that, we will no longer entertain late comments, just to put an end to this. We want to fast track this,” he said.

According to the draft circular, 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.

Dooc said they only gave a one-year operating license to the HMOs who applied for renewal last year, since at that time the formulation of the new rules was still ongoing.

The Commissioner said, 10 HMOs have applied for the renewal of their licenses to date.

“We are processing them, but we are using existing requirements since the new rules are still in their draft version,” Dooc said.

However, Dooc said players who have licenses that will expire after the approval of the new guidelines would need to have the P100 million capital.

“Of course there are big players, and I’m happy to say that they are backed up by strong capital,” Dooc said when asked of what kind of HMOs are applying for licenses.

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