Question & AnswerQ&A (IC CIRCULAR LETTER NO. 6-2005)
A CDO is an official order issued by the insurance regulatory authority to stop an insurance company from conducting business activities, such as issuing new insurance policies, usually due to regulatory violations or insolvency concerns.
The circular letter was signed by Benjamin S. Santos, Insurance Commissioner.
They are required to post conspicuously the list of insurance companies with CDOs in order to inform the public and help prevent the continued issuance of policies by these companies.
Twelve insurance companies were listed as having cease and desist orders.
The purpose is to catch wide public attention and awareness to prevent the public from transacting with disqualified companies and to enforce regulatory compliance.
The company may face further legal sanctions by the Insurance Commission, including fines, suspension, or other penalties under Philippine insurance laws.
It took effect immediately upon issuance on March 3, 2005.
This highlights enforcement challenges in provincial areas where regulatory supervision may be less visible, leading to continued unlawful insurance activity.