Regulatory Relief on the Liquidity Requirement under Circular Letter No. 2016-41
Background
The Insurance Commission in its Circular Letter No. 2024-18, has issued a regulatory relief on the liquidity requirement of Health Maintenance Organizations (HMOs) doing business in the Philippines as previously promulgated under Circular Letter No. 2016-41, wherein HMOs are required to maintain an Acid Test Ratio (ATR) of at least 1.0 at all times.
In Circular Letter No. 2024-18, the commission mandates that all HMOs shall at all times maintain an ATR of at least 0.9 subject to regulatory actions.
For purposes of declaration and/or distribution of dividends, HMOs shall at all times meet the regulatory requirements under CL No. 2016-41, without the regulatory relief provided herein, as required under CL No. 2021-02.
Effectivity
This rule shall be applied to the verification / examination of the 2023 and 2024 Audited Financial Statements and the analysis of Interim Financial Statements with reporting dates from September 30, 2024 until September 30, 2025, unless extended or changed as deemed necessary by the Insurance Commission.
Please see attached article for further information.
