ALJDEC

99A-183-INS · Department of Insurance · 1999-09-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 17, 1999. Record closed on September 24, 1999. APPEARANCES: Steven R. Henry, Esq. on behalf of Petitioner; Kurt Regner on behalf of the Arizona Department of Insurance; Todd C. Wiley, Esq. on behalf of Independent Assurance Co. ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ On September 17, 1999, a hearing was held to consider the Plan and Agreement of Merger whereby Funeral Security Life Insurance Company (the "Insurer"), will merge into World Service Life Insurance Company renamed Lincoln Memorial 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 states of Texas and Arizona. 3. Both Insurer and Petitioner have waived notice requirements of A.R.S. §41-1092.05(D). 4. The shareholder(s) of 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. Insurer has surrendered its certificate of authority to the Department. 7. 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. 8. Petitioner has requested that the $100,000.00 statutory deposit held by the State Treasurer in the name of Insurer be transferred into a statutory deposit account in the name of Petitioner. 10. 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. 11. Petitioner has prepared Articles of Merger it intends to file with the Arizona Corporation Commission.

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 Insurer and Petitioner should be approved. RECOMMENDED ORDER The undersigned Administrative Law Judge recommends that: 1. Petitioner may file its Articles of Merger with the Arizona Corporation Commission. 2. The Plan and Agreement of Merger between Insurer and Petitioner be approved . 3. The statutory deposit of Insurer in the amount of $100,000.00 shall be transferred into a statutory deposit account in the name of Petitioner upon receipt by the Department of Insurance of the following: (1) copies of the Articles of Merger of Insurer and Petitioner certified as having been filed with the Arizona Corporation Commission; and (2) fully executed Forms E125 (Notice of Trust Deposit Delivery) and E126 (Notice of Trust Deposit Release). The statutory deposit cannot be transferred until the Department receives a fully executed copy of the official State Treasurer Release Receipt Form E101. The sum of $100.00 previously credited to the IERF be refunded to Insurer pursuant to A.R.S. §20-159. Insurer shall file its 1999 Annual Statement with the Department, together with all applicable fees, unless Insurer files its Articles of Merger with the Arizona Corporation Commission on or before December 31, 1999. Done this day, September 30, 1999

______________________________________ Lewis D. Kowal Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1999, to:

Department of Insurance Mr. 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