Exhibit 10.52.2
No. 02-1126
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OFFICIAL ORDER
of the
COMMISSIONER OF INSURANCE
of the
STATE OF TEXAS
AUSTIN, TEXAS
Date: October 30, 2002
Subject Considered:
BANKERS NATIONAL LIFE INSURANCE COMPANY
Amarillo, Texas
ORDER TO MAINTAIN FINANCIAL CONDITION
AND TO PROTECT POLICYHOLDERS
General Remarks and official action taken:
On this day, came on for consideration by the Commissioner of Insurance, the
matter of Bankers National Life Insurance Company, Amarillo, Texas (hereinafter
referred to as "RESPONDENT"), which holds a certificate of authority issued by
the Texas Department of Insurance (hereinafter referred to as "the Department).
RESPONDENT holds a certificate of authority under provisions of the Texas
Insurance Code to conduct the business of insurance in the State of Texas.
RESPONDENT, as evidenced by the signature below of its duly authorized
representative, voluntarily agrees to the entry of this Order, acknowledges its
rights to issuance and service of notice of hearing, a public hearing, a
proposal for decision, rehearing by the Commissioner of Insurance (hereinafter
referred to as "the Commissioner"), and judicial review of this administrative
action, and waives such rights, and knowingly and informally disposes of this
case pursuant to the provisions of TEX. INS. CODE ANN. ss.ss.36.104 and
82.051-82.055, TEX. GOV'T CODE ANN. ss.2001.056, and 28 TEX. ADMIN. CODE
ss.1.47.
The Commissioner has jurisdiction over this matter pursuant to TEX. INS. CODE
ANN. art. 1.32 and ss.ss.36.104 and 82.051-82.055, 28 TEX. ADMIN. CODE ss.1.47,
and TEX. GOV'T CODE ANN. ss.ss.2001.054 and 2001.056. The Commissioner has
authority to dispose of this matter as set forth in TEX. INS. CODE ANN. art.
1.32 and ss.ss.36.104 and 82.051-82.055, TEX. GOV'T CODE ANN. ss.2001.056, and
28 TEX. ADMIN. CODE ss.1.47.
COMMISSIONER'S ORDER
BANKERS NATIONAL LIFE INSURANCE COMPANY
1.32 CONSENT ORDER
Page 2 of 5
This Order is intended to memorialize certain matters and arrangements already
agreed to by the COMMISSIONER and RESPONDENT, including RESPONDENT's commitment
to (a) maintain satisfactory financial condition, (b) provide quality service to
policyholders and (c) minimize the impact on RESPONDENT of the restructuring of
Conseco, Inc. described herein.
RESPONDENT is a direct subsidiary of CIHC, Inc. and an indirect subsidiary of
Conseco, Inc. On August 9, 2002, Conseco, Inc. announced that it was undertaking
an effort to restructure its debt. Conseco insurance companies, which includes
RESPONDENT, are regulated by the Commissioner and are separate legal entities
from Conseco, Inc.
This Order is intended to maintain the financial integrity of RESPONDENT and to
assure that any impact from Conseco, Inc.'s restructuring affecting RESPONDENT
in its methods of operation, affiliations, contracts or agreements, or any other
situation contemplated by TEX. INS. CODE ANN. art. 1.32 shall be rectified in
accordance with this Order.
IT IS THEREFORE AGREED BY THE PARTIES AND ORDERED by the Commissioner, pursuant
to TEX. INS. CODE ANN. art. 1.32 and ss.ss.82.051-82.055, that:
1. RESPONDENT shall not request any dividends or other distributions
before January 1, 2003. After January 1, 2003, all dividends or other
distributions from insurance subsidiaries to parents outside the
insurance system or to affiliates outside the insurance system shall
be subject to prior approval by the Commissioner. Application for
approval must include a detailed description of the purpose and use of
the dividends or other distributions. Any dividends or other
distributions approved under this section shall be for the sole
purpose of assisting Conseco, Inc. or CIHC, Inc. in financing their
restructuring, including but not limited to, amortization of debt;
2. RESPONDENT shall continue to maintain sufficient capitalization and
reserves as required by the Texas Insurance Code. RESPONDENT shall use
diligent efforts to maintain, at a minimum, its current risk-based
capital level, and shall not implement any actions the purpose or
likely effect of which is to negatively impact its risk-based capital
level without the prior approval of the Commissioner.
The Texas Administrative Code sets forth rules concerning the minimum
risked-based capital and surplus requirements but in no event reduces
the amount of capital and surplus otherwise required by provisions of
the Texas Insurance Code, the Texas Administrative Code or by
authority of the Commissioner. The purpose of maintaining capital and
surplus is to absorb the financial, underwriting, and investment risks
assumed by an insurer.
COMMISSIONER'S ORDER
BANKERS NATIONAL LIFE INSURANCE COMPANY
1.32 CONSENT ORDER
Page 3 of 5
3. RESPONDENT shall request approval from the Commissioner or his
designated representative (hereinafter referred to as "the
Commissioner's Representative") before it makes any disbursements not
in the ordinary course of its business, unless otherwise agreed to by
the Commissioner or the Commissioner's Representative. Also,
RESPONDENT agrees that it shall not make any guarantees to
non-insurance companies unless approved by the Commissioner;
4. RESPONDENT shall complete any pending transactions previously reported
to the proper insurance regulatory officials, as appropriate and
allowed by law, prior to and during Conseco, Inc.'s restructuring,
unless not approved by the Commissioner;
5. RESPONDENT has obtained a commitment which is included in the board
resolutions described herein from Conseco, Inc. and CIHC, Inc. to
maintain its infrastructure, including but not limited to, employee
retention, systems and physical facilities prior to and during
Conseco's restructuring. This commitment allows for efficient and
continued normal operations by RESPONDENT;
6. RESPONDENT shall continue to permit the examination of its books,
papers, accounts, records, and affairs by the Commissioner or the
Commissioner's Representative pursuant to Article 1.15 of the Texas
Insurance Code. All information provided to the Commissioner or the
Commissioner's Representative pursuant to Article 1.15 of the Texas
Insurance Code, will be treated confidentially to the extent permitted
by Texas law. Any other information provided by RESPONDENT or obtained
by the Texas Department of Insurance in connection with the
restructuring of Conseco, Inc. and which falls outside the scope of
Article 1.15 of the Texas Insurance Code may contain proprietary or
confidential information of Conseco, Inc. and will be subject to Texas
Government Code Chapter 552; and
7. The Board of Directors of RESPONDENT, at specially called meetings or
by unanimous written consent, has simultaneously, with the entry of
this Order, approved and provided resolutions complying with the terms
of this Order, which is effective upon the entry of this Order.
RESPONDENT will receive resolutions from Conseco, Inc. and CIHC,
Inc.'s Boards within seven business days from the entry of this Order
assuring RESPONDENT's compliance with this Order.
IT IS FURTHER AGREED AND ORDERED that the cost incident to the Commissioner's
Representative's service rendered pursuant to this Order shall be fixed
COMMISSIONER'S ORDER
BANKERS NATIONAL LIFE INSURANCE COMPANY
1.32 CONSENT ORDER
Page 4 of 5
and determined by the Commissioner and shall be a charge against the assets and
funds of RESPONDENT to be allowed and paid as the Commissioner determines.
IT IS FURTHER AGREED AND ORDERED that this Order is binding on RESPONDENT, and
its affiliates, officers, directors and attorneys, and on those persons in
active concert or participation with them or who receive actual or constructive
notice of this Order by personal service or otherwise.
IT IS FURTHER AGREED AND ORDERED that this Order shall remain in effect until
terminated by the Commissioner. Nothing herein shall constitute a limitation of
the Commissioner to take other or further action pursuant to the Texas Insurance
Code or the rules and regulations promulgated pursuant to the Texas Insurance
Code as deemed necessary by the Commissioner.
JOSE MONTEMAYOR
COMMISSIONER OF INSURANCE
By:/s/Betty Patterson
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Betty Patterson, CPA, AFE
Senior Associate Commissioner
Financial Program
Delegation Order No. 94-0487
Agreed and Consented to by Bankers National Life Insurance Company on the 24th
day of October, 2002.
By: /s/Elizabeth Coit Georgakopoulos
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Elizabeth Coit Georgakopoulos
Title: President
Reviewed by:
/s/Eric Magee
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Eric Magee
Staff Attorney
Financial Counsel Section
Legal & Compliance Division
COMMISSIONER'S ORDER
BANKERS NATIONAL LIFE INSURANCE COMPANY
1.32 CONSENT ORDER
Page 5 of 5
Financial counsel Section
Legal & Compliance Division
STATE OF __________________ ss.
ss.
COUNTY OF ________________ ss.
BEFORE ME, the undersigned notary public, personally appeared
Elizabeth Georgakopoulos, who being by me duly sworn, deposed as follows:
1. "My name is Elizabeth Georgakopoulos. I am of sound mind, capable of making
this statement, and am personally acquainted with the acts herein stated.
2. I am President of Bankers National Life Insurance Company, which holds a
Certificate of Authority to conduct the business of insurance in the State of
Texas. As President of Bankers National Life Insurance Company, I am authorized
to make this statement and I agree to and execute this Consent Order on behalf
of Bankers National Life Insurance Company.
3. Bankers National Life Insurance Company agrees with and consents to the
issuance and service of the foregoing Article 1.32 Order by Consent to be
entered by the Texas Commissioner of Insurance."
/s/Elizabeth Georgakopoulos
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SWORN TO AND SUBSCRIBED before me the undersigned authority, by
of Bankers National Life Insurance Company on
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this 25th day of October, 2002.
/s/Mary C. Untrauer
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Signature of Notary Public
Mary C. Untrauer
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Printed Name of Notary Public
Notary Public In and For the State of
Indiana
My Commission Expires: January 18, 2010