Insurance Commission: CAP Pension can now undergo conservatorship
The Insurance Commission (IC) on Monday asked the shuttered College Assurance Plans Philippines Inc. (Cappi) and its rehabilitation court to no longer drag Comprehensive Annuity Plans and Pension (CAP Pension) into their troubles after the Supreme Court ruled in favor of the regulator’s petition to protect the subsidiary-firm’s assets.
“The IC will now proceed with the conservatorship of [CAP Pension]. But first, we will examine the financial condition … as of today to see what assets of the company remain. We will then appoint a conservator to recommend the direction that we will take,” Insurance Commissioner Dennis Funa said in a statement.
He took note of the 30-page Supreme Court decision penned by Associate Justice Marvic Leonen and concurred by four associate justices in the chamber’s third division, which “affirmed the position of the IC by enjoining Cappi from including the properties of CAP Pension in Cappi’s corporate rehabilitation proceedings.” The ruling was promulgated on Sept. 9, 2020.
The rehabilitation of Cappi, which had sold educational plans, has been pending before the Makati City Regional Trial Court Branch 149 since 2006.
Cappi was among the biggest preneed firms in the country, which collapsed by the late 1990s after the Asian financial crisis.
In the case of Cappi, its rehabilitation plan approved by the court included the disposition of subsidiaries and affiliates, including CAP Pension, where it had an 86-percent stake in shares of stock.
Despite the majority ownership, the high court ruled that CAP Pension “retained a [legal] personality separate and distinct from [Cappi] throughout its rehabilitation proceedings,” Funa said.
The ruling allowed CAP Pension to “own properties and incur liabilities independently of CAPPI,” Funa added.
But CAP Pension was also not without problems.
The IC had been planning to place CAP Pension under conservatorship as early as 2010 due to its financial woes.
Funa noted that the firm’s capital stock had been impaired by P5.17 billion and had P3.14 billion in trust fund deficiencies. It had also failed to set up a separate account for P169.45 million in insurance premium funds.
He said placing the company under conservatorship “is primarily aimed at restoring the viability of the company and allows the IC, through the appointed conservator, to become more directly involved in the management of the company.” INQ
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