The Insurance Commission (IC) has extended regulatory relief for health maintenance organizations (HMOs) by postponing the implementation of the standard acid test ratio of 1 until September 2025.
This decision comes as HMOs continue to grapple with the financial challenges posed by the COVID-19 pandemic.
The acid test ratio is a crucial measure of an HMO’s ability to meet its obligations without resorting to asset sales.
In 2023, the IC adjusted the ratio to 0.75 to ease financial pressure on the industry, which reported a combined loss of ₱5.71 billion in 2022 and 2023.
“The Commission recognizes the need to extend the regulatory relief provided by CL No. 2023-24 to give HMOs more time to recover,” Insurance Commissioner Reynaldo A. Regalado said in circular letter 2024-18, signed on October 10.
In September, the IC issued a cease-and-desist order against Stotsenberg Healthcare Systems, which was placed under conservatorship on July 29, 2024.
Forticare Health Systems International also entered conservatorship on July 31, 2024, while Carehealth Plus Systems International was put under receivership on June 27, 2024.
