THE INSURANCE Commission (IC) has placed health maintenance organization (HMO) Caritas Health Shield, Inc. (CHSI) under receivership effective Aug. 1, it said in a notice.
This comes five months after the company was placed under conservatorship.
Jay A. Ramirez, Attorney I of the IC’s Conservatorship, Receivership and Liquidation Division, has been designated as the interim ex-officio receiver of CHSI.
CHSI can still submit a proposal for rehabilitation within 90 days from the appointment of the receiver, or else it will be placed under liquidation.
The IC also issued a revised notice of stay order on Tuesday that prohibits the company from collecting premiums and renewing existing plan “in order to consolidate, preserve, and protect the assets of CHSI for the benefit of the members and creditors while undergoing receivership proceedings.”
“CHSI is directed to pay in full all approved administrative expenses incurred after the date of the issuance of this stay order,” the IC said in the stay order.
CHSI is also not allowed to pay its liabilities and move its properties, except “in the ordinary course of business.”
“All actions or proceedings, in court or otherwise, for the enforcement of all claims, whether for money or otherwise, against CHSI are suspended,” the IC added.
The IC has also placed under conservatorship the two subsidiaries of CHSI, namely pre-need company Caritas Financial Plans, Inc. and life insurance company Caritas Life Insurance Corp. Both companies were told to cease and desist from conducting business.
Minutes of CHSI’s annual stockholders’ meeting held in March and posted on its website showed the company was placed under conservatorship as it was unable to meet the P1.3 trillion minimum net worth requirement for insurers that took effect at the end of 2022, up from P900 million previously.
The company submitted two action plans to the IC to comply but both were rejected, which led to it being placed under conservatorship.
CHSI also reported a “huge” reserve liability from the Gold, Prime and Premiere products sold from 1998 to 2017 that ate up 90% of its reserves.
IC data showed that CHSI had P9.19 billion in assets and P8.7 billion in liabilities at end-June 2022. It recorded a net loss of P662,548 in the same period. — AMCS