G.R. No. 213130 & G.R. No. 218193, September 09, 2020
SECURITIES AND EXCHANGE COMMISSION & INSURANCE COMMISSION, PETITIONERS, VS. COLLEGE ASSURANCE PLAN PHILIPPINES, INC., RESPONDENT. (G.R. No. 213130)

INSURANCE COMMISSION, PETITIONER, VS. COLLEGE ASSURANCE PLAN PHILIPPINES, INC., RESPONDENT. (G.R. No. 218193)

FACTS

These are consolidated cases. Respondent College Assurance Plan Philippines, Inc. (CAPPI), a pre-need company, filed a Petition for Corporate Rehabilitation before the Regional Trial Court of Makati City (rehabilitation court) on August 26, 2005. The court issued a Stay Order on September 13, 2005, gave due course to the petition on December 16, 2005, and approved CAPPI’s revised Rehabilitation Plan on November 8, 2006. The approved plan ordered the disposal of CAPPI’s subsidiaries and affiliates, including its 86%-owned subsidiary Comprehensive Annuity Plans and Pension (CAP Pension), not later than December 31, 2008.
Subsequently, Republic Act No. 9829 (Pre-Need Code) took effect on December 4, 2009, transferring regulatory supervision of pre-need companies from the Securities and Exchange Commission (SEC) to the Insurance Commission (IC). Pursuant to this law, the IC placed CAP Pension under conservatorship on September 13, 2010. CAPPI filed an Urgent Motion to Enforce Stay Order before the rehabilitation court, which then issued an April 15, 2011 Order reiterating its jurisdiction over CAPPI and all its assets, including CAP Pension. The IC assailed this order via a Petition for Certiorari (CA-G.R. SP No. 124031), which the Court of Appeals dismissed on April 28, 2015, leading to G.R. No. 218193.
Separately, on September 21, 2012, CAPPI filed a Motion for Extension and Modification of the Rehabilitation Plan before the rehabilitation court, praying for an extension until 2021. The rehabilitation court granted the motion and approved a 2012 Revised Rehabilitation Plan for a period of three years via a September 5, 2013 Order. The SEC and IC assailed this order via a Petition for Certiorari (CA-G.R. SP No. 131991), which the Court of Appeals dismissed on June 18, 2014, leading to G.R. No. 213130.

ISSUE

The primary issues resolved were: (1) Whether the rehabilitation court or the Insurance Commission has jurisdiction over CAPPI’s subsidiary, CAP Pension, after the enactment of the Pre-Need Code; and (2) Whether the rehabilitation court properly extended CAPPI’s rehabilitation period and modified the approved rehabilitation plan.

RULING

The Supreme Court denied the petitions. On the jurisdictional issue (G.R. No. 218193), the Court held that the rehabilitation court validly acquired jurisdiction over CAP Pension ahead of the Insurance Commission when it approved CAPPI’s Rehabilitation Plan in 2006. The doctrine of primary jurisdiction does not apply as the rehabilitation court’s jurisdiction was already vested prior to the Pre-Need Code’s effectivity. The rehabilitation court’s orders pertaining to CAP Pension were merely in implementation of its final and executory 2006 Resolution approving the plan which ordered the disposal of subsidiaries. The Insurance Commission’s act of placing CAP Pension under conservatorship interfered with the rehabilitation court’s authority.
On the issue of extending the rehabilitation period (G.R. No. 213130), the Court ruled that the rehabilitation court did not commit grave abuse of discretion. Under the 2008 Rules of Procedure on Corporate Rehabilitation, the rehabilitation court may approve modifications to the rehabilitation plan upon recommendation by the rehabilitation receiver. The receiver evaluated CAPPI’s proposal and recommended a three-year extension subject to annual review, which the court approved. This was a valid exercise of the court’s continuing jurisdiction to oversee the rehabilitation and ensure its success. The doctrine of immutability of judgment does not apply as subsequent circumstances may render the execution of a final decision unjust, and courts may adjust periods to serve the higher purpose of rehabilitation.