The Insurance Commission (IC) has thrown the book at a mutual benefit association (MBA) and shut down its operations for engaging in insurance activities without a license.
According to Insurance Commissioner Dennis B. Funa, the agency has zero tolerance for illegal activities and bore down on the operations of the Bureau of Fire Protection Mutual Aid Beneficiary Association Inc. (BFPMBAI), a business proven engaged in unlicensed insurance activities in the country.
“The commission is of the adamant position that BFPMBAI is a mutual benefit association doing an insurance business, as defined under Section 403 of the Insurance Code. Accordingly, we have no recourse but to enforce prompt corrective action by placing BFPMBAI under conservatorship in order to protect the interests of its members and creditors,” Funa said.
In an order issued last December, Funa placed BFPMBAI under conservatorship on the ground that the entity is in a state of continuing inability or unwillingness to maintain a condition of solvency or liquidity deemed adequate to protect the interest of policyholders and creditors.
After proving that BFPMBAI was operating as a MBA without the necessary secondary license from the IC, Funa issued a decision in February last year ordering the BFPMBAI to immediately cease and desist from continuing in its operations and to pay a P200,000 fine.
The order stemmed from the administrative complaint filed against BFPMBAI by Fire Services Mutual Benefit Association Inc. (FSMBAI), a duly licensed MBA whose primary purpose is provide for the payment of benefits exclusively to its members and their dependents.
The members of FSMBAI are officers, employees and retirees of the Bureau of Fire Protection and personnel of the Department of the Interior and Local Government.
The February 2017 decision was later affirmed also by the IC in a resolution dated September of the same year.
“After the issuance of the September 2017 resolution and prior to the placing of the entity under conservatorship, the IC gave BFPMBAI an opportunity to explain and show cause why it should not be placed under conservatorship,” he said.
In an explanation submitted by BFPMBAI, through its counsel Ponce Enrile Reyes and Manalastas Law Offices, the entity alleged that any IC attempt to enforce its cease-and-desist order was premature considering that the resolution is now the subject of BFPMBAI’s appeal to the secretary of finance.
“The Commission cannot be deprived of its regulatory powers under the Insurance Code by reason of the pendency of an appeal taken from the commission’s decision, order, or ruling issued in the exercise of its adjudicatory powers, unless enjoined by a court of competent jurisdiction or directed by the secretary of finance,” he said.
The IC is advising the public to verify the identity of an entity before procuring any insurance, preneed or health maintenance product and check whether the entity is licensed to do business
“The IC has zero tolerance for unlicensed insurance activity in the country, thus we are advising the public to report any fraudulent entity and activities to our office so we can immediately conduct an investigation to prevent further harm to the public,” he reiterated.