IC shuts down BFPMBAI operations

THE Insurance Commission (IC) has shut down the operations of Bureau of Fire Protection Mutual Aid Beneficiary Association, Inc. (BFPMBAI) for conducting business without license.

In a statement sent to reporters on Thursday, Insurance Commissioner Dennis B. Funa announced he has shut down BFPMBAI via an order putting the association under conservatorship on the ground of “continuing inability or unwillingness to maintain a condition of solvency or liquidity deemed adequate to protect the interest of policyholders and creditors.”

The order, dated Dec. 12, was issued after the commission found out that BFPMBAI continued its operations despite having an administrative case filed by Fire Services Mutual Benefit Association, Inc. (FSMBAI).

FSMBAI is a duly licensed mutual benefit association comprised of officers, employees and retirees of Bureau of Fire Protection and some personnel from Department of the Interior and Local Government.

In line with the administrative case, Mr. Funa issued a decision on Feb. 9, 2017 ordering BFPMBAI to cease and desist its operations, as well as pay a P200,000 fine after the IC learned that the association is operating as an MBA without the necessary

secondary license from the commission.

The Feb. 9 decision was later affirmed by the commission in a cease and desist order issued on Sept. 8.

“[ W]e have no recourse but to enforce prompt corrective action by placing BFPMBAI under conservatorship in order to protect the interests of its members and/ or creditors,” Mr. Funa said.

BFPMBAI, in an explanation following the issuance of the cease and desist order, said the IC’s move to halt its operations is premature, considering that “the resolution of the same is now the subject of BFPMBAI’s appeal to the Secretary of Finance.”

In response, Mr Funa said: “The [c]ommission 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.”

Mr. Funa also advised the public to report any fraudulent insurance companies to their office.

“The Insurance Commission has zero tolerance for unlicensed insurance activity in the country,” Mr. Funa added.

The amended Insurance Code defines an MBA as a non-stock and non- profit company organized for the purpose of “paying sick benefits to members, or of furnishing financial support to members while out of employment, or of paying to relatives of deceased members of fixed or any sum of money.”

IC granted 35 MBAs licenses to operate until 2018, data as of end-August 2017 showed.