ALJDEC

99A-257-INS · Department of Insurance · 1999-12-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 22, 1999 APPEARANCES: Jeffrey Verbin, Esq. for the Petitioner; Kurt Regner for the Arizona Department of Insurance ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________

On December 22, 1999, a hearing was held to consider the Plan and Agreement of Merger whereby Community Life Insurance Company (the "Insurer"), will merge into M & I Insurance Company of Arizona, Inc. (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 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. The Insurer has surrendered its certificate of authority to the Department. 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. The Petitioner has requested that the $100,000.00 statutory deposit held by the State Treasurer in the name of the Insurer be transferred into a statutory deposit account in the name of the Petitioner. 9. 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. 10. Insurer owes the IERF the sum of $420.12. 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 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 $100,000.00 shall be transferred into a statutory deposit account in the name of the Petitioner upon receipt by the Department of Insurance of the following: (1) payment of the sum of $420.12 to the IERF; (2) copies of the Articles of Merger of the Insurer and the Petitioner certified as having been filed with the Arizona Corporation Commission; and (3) 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 the Insurer pursuant to A.R.S. §20-159. The Insurer shall file its 1999 Annual Statement with the Department, together with all applicable fees, unless the Petitioner files its Articles of Merger with the Arizona Corporation Commission on or before December 31, 1999. Done this day, December 22, 1999.

______________________________________ LEWIS D. KOWAL Administrative Law Judge

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

Charles R. Cohen, Director Department of Insurance ATTN: Curvey Burton 2910 North 44th Street, Ste. 210 Phoenix, AZ 85018

By _______________________________

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