The Insurance Commission (IC) has capped the penalty imposed for the late submission of reportorial requirements of mutual benefit associations (MBAs).
According to IC’s circular letter 2023-05 dated January 25, the commission further finds the need to limit the amount of imposable penalties against an MBA’s late submission of reportorial requirements.
“ln view of the effects of the ongoing pandemic and the imposition of community quarantine restrictions for the past years, an MBA which has incurred aggregate late penalties amounting to more than P300,000 relative to the submission of its reportorial requirements prior to the date of issuance of this circular letter may request for its penalties to be capped at P300,000 per year,” the circular said.
“In case of aggregate penalties amounting to more than P300,000 for late submission of reportorial requirements incurred after the effectivity of this circular letter, the IC, may, upon request of the MBA concerned, cap the aggregate imposable penalty for any given year at P300,000,” it added.
The IC however said any MBA incurring an aggregate penalty of at least P300,000 for a year shall be given a warning, or have its license suspended or revoked, at the discretion of the commissioner.
Once an MBA is issued a valid certificate of authority, it is mandated to submit all reportorial requirements of the IC from the date of such issuance.
In 2014, the IC issued a circular letter which penalizes MBAs and insurers on the delays in the submission of requirements. In 2019, the agency issued another circular providing the guidelines and grounds for the reduction of penalties due to delays.
The IC also issued a circular in 2021 already increasing the penalty reduction from 30 percent to 50 percent.
“Even with the reduction of penalties incurred by MBAs, as they are organized not for profit, the same still proved to be burdensome for them,” the IC said.
