DOF: BFPMAI is an illegal mutual benefit group

The Department of Finance (DOF) has reaffirmed that the Bureau of Fire Protection Mutual Aid and Beneficiary Association Inc. (BFPMBAI) is operating illegally as a mutual benefit association (MBA).

On on Tuesday, June 21,the DOF said it is siding with the Insurance Commission, its attached agency, in declaring that BFPMBAI as illegal and operating without a license from the IC.

A statement from the IC on Monday said that DOF Secretary Carlos G. Dominguez III on May 24 has “upheld” IC Commissioner Dennis Funa’s 2017 ruling in an administrative case filed by the Fire Service Mutual Benefit Association Inc. (FSMBAI) against BFPMBAI.

The IC said it has fined BFPMBAI P200,000 and ordered it to immediately cease-and-desist from continuing its operations as an unlicensed MBA.

“In the administrative case filed before the IC, BFPMBAI argued that it was not operating as an MBA, but as a mutual aid and beneficiary association organized under Section 30 (c) of the National Internal Revenue Code (NIRC) and denied that it is not engaged in the provision of insurance benefits because its members are covered by policies issued by a private insurance company,” said IC.

However, despite that BFPMBAI still argued that the IC has no jurisdiction over it, and that it was denied due process of law, the DOF still affirmed the IC ruling on its case. The BFPMBAI also opposed the IC’s cease-and-desist order and fine, and it also contested FSMBAI’s filing against it.

“The DOF ruled that IC had jurisdiction over the instant case, since IC is the sole government agency mandated to ensure the faithful execution and enforcement of the provisions of the Insurance Code as well as the efficient regulation of the insurance industry,” said the IC.

The IC also said the DOF agreed that based on records, “BFPMBAI complied with all the requisites to be considered as a mutual benefit association as stated in Section 430 of the Insurance Code, thereby affirming the IC’s findings of illegal business operations.”

The DOF likewise affirmed the IC’s “statutory power to issue the cease-and-desist order and to impose fines.”

“Also, in the DOF’s Decision, Secretary Dominguez held that the IC did not fail to afford BFPMBAI due process of law as it was given the opportunity to be heard when BFPMBAI attended the pre-trial conference, hearings, and filed its pleadings” in the administrative case decided by the IC in 2017, said the IC.

The IC said Dominguez affirmed that “any procedural defect that occurred in the proceedings was subsequently cured by BFPMBAI’s filing of a motion for reconsideration and its appeal to the DOF, pursuant to a Supreme Court ruling.”

The DOF also agreed with the IC’s finding that FSMBAI “had the juridical personality to institute the administrative case against BFPMBAI, as it had the statutory power under the Corporation Code to sue under its own name as a private corporation that had an existing Certificate of Incorporation issued by the Securities and Exchange Commission.”

“As mentioned by the Honorable Secretary in his Decision dated 24 May 2022, the IC takes to heart its duty to ensure the faithful execution and enforcement of the provisions of the Insurance Code,” said Funa.

He added that the “IC very much appreciates the DOF’s acknowledgment and affirmation in its Decision of our mandate to safeguard the rights and interests of the insuring public against the deleterious effects of unsanctioned and unsupervised activities of unregistered entities.”

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