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To promote health security, Bong Go files bill that seeks to strengthen regulation of medical insurance providers and boost industry competition

April 17, 2021 - Saturday 12:04 PM by MDM

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On Thursday, April 15, Senator Christopher “Bong” Go filed Senate Bill No. 2133 which seeks to introduce a set of amendments to Presidential Decree No. 1460, otherwise known as ‘The Insurance Code of 1978’, in order to institutionalize the regulations governing health maintenance organizations (HMOs) and provide affordable, improved and responsive health care to all Filipinos. 

“The coronavirus disease has underscored to many Filipinos the need to invest in health care. As insurance markets become more competitive, we have to be pro-active, revisit our policies and ensure that the necessary safeguards are in place to protect public interest,” said Go. 

“Market access alone is not enough. Regulatory reforms are also needed if we want to ensure fair and vigorous competition,” he added. 

The Senator, who serves as Chair of the Senate Committee on Health, also pointed out that insurance, pre-need and HMO-regulated entities are making significant contributions to the country’s economy. 

Life insurance, non-life insurance, and mutual benefit associations commanded an industry asset base of P1.72 trillion in the second quarter of 2019, an 11.79% increase from the P1.54 trillion recorded during the same period the previous year. For HMOs, industry assets grew from P32.91 billion in 2017 to P38.96 billion in 2018. At the same time, their total revenue grew by 15% from P39.32 billion to P45.30 billion. 

Under Executive Order 192 s. 2015, the Insurance Commission is granted jurisdiction over HMOs in the country, but ambiguity remains over whether the provisions of the Insurance Code also apply to the said organizations. 

To correct this, Go proposes amending the Insurance Code and explicitly including HMOs into the law’s coverage which shall enable the Commission to provide stricter supervision to better protect the industry and the insuring public from unscrupulous practices. 

In a move meant to enhance industry competition, HMOs will be subjected to the provisions of the Code not explicitly provided for in EO 192. These provisions include the Commission’s powers to issue cease-and-desist orders to prevent fraud or injury to the public. 

The Senator further suggests converting the IC into a collegial body composed of five Commissioners, including a chairperson and three members who shall be appointed by the Philippine President, and one senior officer designated by the Bangko Sentral ng Pilipinas Governor as ex-officio Commissioner. 

He also proposed putting the Commission under the supervision of the BSP so all financial service providers in the country are regulated by a single regulatory authority. 

With regard to the IC’s powers and authority, Go adds the following amendments be made in the Code: (1) giving the Commission authority to direct every aspect of its organization, management, operations and administration; (2) granting it primary and exclusive power to adjudicate claims involving pre-need plans and HMO products or services; and (3) strengthening the IC’s regulatory power to examine state insurance agencies. 

Under the last amendment, all state insurance agencies, including the Philippine Health Insurance Corporation, will be examined for their financial condition and methods of transacting business at least once every two years and mandated to implement any and all findings by the IC. 

A report based on the examination shall be submitted to the IC Governing Board, BSP, Office of the President, and two chambers of Congress. 

“Bagamat mabigat ang pasakit na idinulot ng kasalukuyang pandemya, pagkakataon rin ito upang maisaayos at mas mapabuti ang mga polisiya at patakaran ng gobyerno para maging mas handa at protektado ang mga Pilipino sa anumang krisis na darating,” Go said.