IC scraps higher capitalization for HMOs

The government will no longer increase the minimum paid-up capital of existing health maintenance organization (HMOs), but they will undergo tiering based on net worth instead.

- LOUISE MAUREEN SIMEON

In an advisory, the Insurance Commission (IC) released a new draft circular on the proposed revision in the minimum capitalization, financial capacity and other regulatory requirements of HMOs.

The release of the circular comes on the heels of an IC decision to conduct a second round of public consultation on the matter. The IC announced in July last year its plan to raise the minimum paid-up capital of HMOs, which was supposed to take effect by end-2024.

In November 2024, however, IC chief Reynaldo Regalado said the agency was still reviewing the plan and they have a "moving target."

Based on the new draft, only new HMOs should have a paid-up capital of at least P100 million.

The original plan was to increase the prevailing minimum paid-up capital requirement to P50 million for existing HMOs and P100 million for new entrants. Further hikes were supposed to occur every three years to hit P500 million by 2034.

Currently, existing domestic HMOs must have a minimum paid-up capital of at least P10 million.