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October 07, 2022

There is no mercy for fraudsters in insurance, pre need and HMOs under the industry-wide blacklist rule 

Insurance Commission chief Dennis Funa continues to weed out the industry of erring individuals found guilty of fraud or misrepresentation.

Funa issued Circular Letter No. 2022- 07 reminding pre-need companies, mutual benefit associations, trust for charitable uses, and health maintenance organizations (HMO) about the online submission of reports on the negative list of officers and employees.

Funa directed these institutions with inactive as well as active officers and employees who may have been found guilty of or with pending complaints filed against them before the company, any administrative body, or court.

The negative list contains names of officers and employees who committed the following illegal acts:

1) Materially misrepresented statements in the application requirements;

2) Obtained or attempted to obtain a license by fraud or misrepresentation;

3) Materially misrepresented the terms and conditions of pre-need or HMO plan sold or offered to sell;

4) Solicited, sold or attempted to solicit or sell a pre-need or HMO plan bymeans of false or misleading representation and other fraudulent means;

5) Terminated for cause from another pre-need or HMO company;

6) Convicted of any crime involving any pre-need or HMO plan, security orfinancial product;

7) Convicted of an offense involving moral turpitude or involving fraud orembezzlement or theft, estafa or other fraudulent acts or transactions;

8) By reason of any misconduct, enjoined by order, judgement or decree by any court, quasi-judicial body or administrative agency of competent jurisdictionfrom acting as a director, officer, employee, consultant, agent or occupyingany fiduciary position;

9) Willfully violated, aided, abetted, counseled, commanded, inducedor procured the violation of the Pre-need Code, the Insurance Code, theSecurities Regulation Code or any related laws and any rules or ordersthereunder;

10) Judicially declared to be insolvent or incapacitated to contract;

11) Found guilty by a foreign court, regulatory authority or government agency ofthe acts or violations similar to any of the acts or misconduct enumerated inthe preceding paragraphs;

12) Willfully allowing the use of one’s license by a non-licensed or barred individual, and

13) Analogous circumstances.

Funa said that failure to submit the required report or certification within the prescribed deadline shall be meted with the same penalty, as in CL No. 2020-90 dated September 7, 2020, of P5,000 per delay, but in no case shall the total penalty exceed P50,000.

Late submission beyond the deadline shall be deemed as non-submission that would result to a penalty amounting to P100,000.

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