ALJDEC

98A-196-INS · Department of Insurance · 1998-12-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 17, 1998 APPEARANCES: Thomas E. Haney, Esq. On behalf of the Petitioner ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________

On December 17, 1998, a hearing was held to consider the Plan and Agreement of Merger whereby Pennco Life Insurance Company (the "Insurer"), will merge into First Union 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 the 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 the 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 surrendered its certificate of authority to 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. 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. 9. The Petitioner has prepared Articles of Merger that it intends to file with the Arizona Corporation Commission. 10. The Petitioner has requested that the $100,000.00 statutory deposit held by the State Treasurer in the name of the Insurer be refunded to the Insurer. 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 released upon receipt by the Department of Insurance of the following approved . The statutory deposit of the Insurer in the amount of $100,000.00: (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 fully executed Form -E126 (Notice of Statutory Deposit). The statutory deposit cannot be released until the Department receives a fully executed copy of the official State Treasurer Release Receipt Form E101. 4. The sum of $100.00 previously credited to the IERF be refunded to the Insurer pursuant to A.R.S. §20-159. 5. The Insurer shall file its 1998 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, 1998. Done this day, December 18, 1998.

_________________________________ Lewis D. Kowal Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1998, to:

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

Attention: Curvey Burton

By _______________________________

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Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826