The health maintenance organization Caritas Health Shield Inc. (CSHI) is facing possible liquidation after the Insurance Commission (IC) placed it under receivership and prohibited it from doing business.
Also, two of CSHI’s subsidiaries—Caritas Financial Plans Inc. and Caritas Life Insurance Corp.—are in trouble and the IC has placed them under conservatorship in an effort to keep them afloat.
Caritas Manila, the social arm of the Roman Catholic Church in the Philippines, has clarified that it is not related to these groups.
In a public advisory, Insurance Commissioner Reynaldo Regalado said CSHI was placed under receivership effective Aug. 1 and assigned lawyer Jay Ramirez of the IC’s conservatorship, receivership and liquidation division as interim ex officio receiver of the HMO.
From that date, CSHI “may still submit a proposal for rehabilitation within 90 days, otherwise [the company] will be placed under liquidation,” Regalado said.
The IC also issued an order suspending all payment by CSHI of claims, until further notice.
CSHI is further barred from selling, transferring or disposing of any asset without the approval of the IC.
CSHI also may not pay any liabilities nor collect premiums from members.
According to CSHI records from the annual stockholders’ meeting held last March 1, the company’s liabilities from its products sold from 1998 to 2017 ate up 90 percent of its reserves.
Also, CSHI incurred a net worth deficiency due to the strict application of both accounting and actuarial standards imposed since 2015. This was when the HMO business sector was placed under the regulatory authority of the IC.