THE Insurance Commission (IC) said it has now been cleared to take a unit of College Assurance Plans Philippines, Inc. (CAPPI) into conservatorship, after the Supreme Court (SC) barred the pre-need firm from selling the subsidiary to support its rehabilitation.
“With this ruling of the Honorable Supreme Court, the IC can proudly state that it was able to protect the rights and interests of the planholders of CAP Pension (Comprehensive Annuity Plans and Pension), consistent with our mandate under the Pre-Need Code of the Philippines,” Insurance Commissioner Dennis B. Funa said.
“The Insurance Commission will now proceed with the conservatorship of the company. But first we will examine the financial condition of CAP Pension 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,” Mr. Funa added.
Firms under conservatorship can no longer write new insurance policies. The appointed conservator is responsible for managing the company’s assets and liabilities.
CAP Pension is a subsidiary of CAPPI. CAPPI wanted to dispose of CAP Pension’s properties as part of its rehabilitation plan.
The SC barred this course of action in a May 12 ruling that CAP Pension is a separate company and is “not liable for the obligations of its parent corporation.”
The decision affirmed that the IC, as the regulator, will manage the financial affairs of the subsidiary.
“CAPPI’s questionable real estate investments, even exceeding the limitations set by the company’s previous regulator, the SEC, led to the company’s downfall beginning in the early 2000s,” the IC said.
It said the pre-need company was considered a pioneer in the industry in the 1980s, with its education plans that guaranteed payment of tuition once beneficiaries begin college. — Beatrice M. Laforga