ALJDEC

00A-181-INS · Department of Insurance · 2000-12-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 14, 2000 APPEARANCES: Thomas E. Haney, Esq. for Petitioner; Kurt Regner for the Arizona Department of Insurance ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________

On December 14, 2000, a hearing was held to consider the Plan and Agreement of Merger whereby First Chicago NBD Insurance Company (the "Insurer"), will merge into Banc One Life Insurance Company (the "Petitioner"). Based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. Insurer is duly qualified and authorized as an insurer in the State of Arizona. 2. Petitioner is duly qualified and authorized as an insurer in the State of Arizona. 3. Both the Insurer and Petitioner have waived notice requirements of A.R.S. §41-1092.05(D). 4. The shareholder(s) of the Insurer and the shareholder(s) of Petitioner have waived notice of the hearing. 5. No evidence has been produced at the hearing of this matter that would indicate or form the basis for a finding that the Plan and Agreement of Merger previously filed with the Department:

a. Is contrary to law.

b. Is unfair in the terms and conditions of the issuance and exchange of securities.

c. Would substantially reduce the security of and service to be rendered to policyholders of the Insurer in this State or elsewhere.

6. The Insurer has filed an Affidavit of Lost Certificate of Authority with the Department. 7. Special notice to creditors and policyholders of the Petitioner, setting forth the date, place, nature and purpose of the hearing was published and mailed at least ten (10) business days before said hearing, and known creditors received individual notice by mail, as evidenced by an affidavit of publication. 8. Petitioner has filed a financial statement with the Department reflecting its financial condition as of September 30, 2000. 9. Based upon the Department's review of Petitioner's filing, the Department recommended that the Director approve the Plan and Agreement of Merger filed in this matter. 10. Petitioner has requested that the $150,000.00 statutory deposit held by the State Treasurer in the name of the Insurer be refunded to the Insurer. 11. Petitioner has also requested that the $100.00 deposit Insurer has with the Insurance Examiners’ Revolving Fund (“IERF”) be released to Insurer upon approval of the merger. 12. Petitioner has prepared Articles of Merger it intends to file with the Arizona Corporation Commission. . . . 13. Petitioner requested that the statutory deposit be released within 30 days of receipt of a properly completed Form E126 (Notice of Trust Deposit Release). Petitioner’s counsel represented to this Tribunal that he was aware of instances where the Department has taken up to one year to release the IERF deposit. The Department had no objection to the request. 14. Petitioner also requested that the $100.00 IERF deposit be returned to Petitioner within 30 days of the effective date of the Order entered in this matter. Kurt Regner, the Department’s representative, objected to that request, stating he lacked knowledge as to whether the time frame is one that the Department could meet. CONCLUSIONS OF LAW The evidence of record established that Petitioner has complied with the provisions of A.R.S. §20-731 and established by credible evidence that the Plan and Agreement of Merger between the Insurer and Petitioner should be approved. RECOMMENDED ORDER The undersigned Administrative Law Judge recommends that: 1. The Petitioner may file its Articles of Merger with the Arizona Corporation Commission. 2. The Plan and Agreement of Merger between the Insurer and the Petitioner be approved. 3. The statutory deposit of the Insurer in the amount of $150,000.00 be released within 30 days of the Department’s receipt of the following: (1) copies of the Articles of Merger of the Insurer and the Petitioner certified as having been filed with the Arizona Corporation Commission; and (2) a properly completed and fully executed Form E126 (Notice of Statutory Deposit). 4. The sum of $100.00 previously credited to the IERF be refunded to the Insurer within 90 days of the effective date of the Order entered in this matter pursuant to A.R.S. §20-159. . . . . . . . . . 5. The Insurer shall file its 2000 Annual Statement with the Department, together with all applicable fees, unless the Insurer files its Articles of Merger with the Arizona Corporation Commission on or before December 31, 2000. Done this day, December 18, 2000

______________________________________ Lewis D. Kowal Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2000, to:

Department of Insurance Charles R. Cohen 2910 North 44th Street, Ste. 210 Phoenix, AZ 85018

ATTN: Curvey Burton

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826