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1 CYNTHIA J. LARSEN (STATE BAR NO. 123994) ELECTRONICALLY
clarsen@orrick.com F I L E D
2 JUSTIN GIOVANNETTONE (STATE BAR NO. 293794) Superior Court of California,
County of San Francisco
jgiovannettone@orrick.com
3 ORRICK, HERRINGTON & SUTCLIFFE LLP 11/19/2019
400 Capitol Mall, Suite 3000 Clerk of the Court
4 Sacramento, CA 95814-4497 BY: ERNALYN BURA
Deputy Clerk
Telephone: +1 916 447 9200
5 Facsimile: +1 916 329 4900
6 Attorneys for Insurance Commissioner EXEMPT from filing fees per
in his capacity as Conservator of Govt. Code § 6103
7 California Insurance Company
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF SAN FRANCISCO
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WARWICK AMUSEMENTS CASE NO. CGC-16-551614
12 CORPORATION, et al.
NOTICE OF ORDER APPOINTING
13 Plaintiffs, COMMISSIONER AS CONSERVATOR
OF CALIFORNIA INSURANCE
14 vs. COMPANY AND ENJOINING
PROCEEDINGS [INSURANCE CODE
15 APPLIED UNDERWRITERS, INC., et al. §1020]
16 Defendants.
17 PLEASE TAKE NOTICE that California Insurance Company ("CIC") has been placed
18 into conservation pursuant to the provisions of California Insurance Code sections 1010, et seq.
19 by the Superior Court for San Mateo County ("Conservation Court") which has exclusive
20 jurisdiction over all matters relating to the conservation of CIC. Pursuant to Insurance Code
21 §§ 1011 and 1020 and the November 4, 2019 Order: (1) Appointing Conservator and
22 (2) Restraining Specific Activities ("Conservation Order"), the California Insurance
23 Commissioner has been appointed the Conservator of CIC and the institution, prosecuting or
24 maintenance of lawsuits and arbitrations (except before the California Workers' Compensation
25 Appeals Board or equivalent administrative boards of other states) by any person or entity against
26 CIC or the Conservator, including the above-captioned arbitrations, are enjoined.
27 ////
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ORDER APPOINTING COMMISSIONER AS CONSERATOR OF CIC
AND ENJOINING PROCEEDINGS [INSURANCE CODE §1020]
1 A true and correct copy of the Conservation Order is attached hereto as Exhibit A.
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Dated: November 19, 2019 CYNTHIA J. LARSEN
4 JUSTIN GIOVANNETTONE
ORRICK, HERRINGTON & SUTCLIFFE LLP
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By:
7 CYNTHIA J. LARSEN
Attorneys for Insurance Commissioner
8 in his capacity as Conservator of
California Insurance Company
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ORDER APPOINTING COMMISSIONER AS CONSERATOR OF CIC
AND ENJOINING PROCEEDINGS [INSURANCE CODE *1020]
ENDOPSED FILED
SAN MATEO
1 COUNTY
NOV 0 4 2019
Clerk of the
By Superior Court
3 RJa Dominic
DEPUTY
CLERK
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Exempt from filing fees pursuant to
7 Government Code section 6103
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9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 FOR THE COUNTY OF SAN MATEO — UNLIMITED JURISDICTION
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INSURANCE COMMISSIONER OF THE Case No. 19CIV06531
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STATE OF CALIFORNIA,
[PROPOSED] ORDER APPOINTING
13 INSURANCE COMMISSIONER AS
Applicant,
CONSERVATOR and RESTRAINING
14 ORDERS;
v.
15 [Ins. Code, § 1011]
CALIFORNIA INSURANCE COMPANY, a
16 California corporation,
Date: November 4, 2019
17 Respondent. Time: 2:00 p.m.
Dept.:
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Printed on Recycled Paper
1PROPOSED1 ORDER APPOINTING INSURANCF CONIMISSIONFR AS CrINSFR VA-MR ANTI RFSTR (IQ ncoc•
1 WREW48.£-43] ORDER
2 The California Insurance Commissioner's Verified Ex Parte Application for Order Appointing
3 Conservator having been filed herein, it being shown to the Court's satisfaction from said Application
4 that the Commissioner has (1) found that California Insurance Company ("CIC"), a California
5 domiciled insurance company, entered into a transaction the effect of which, if consummated, would
6 merge CIC into and with California Insurance Company II ("CIC In, a New Mexico domiciled
7 insurance company without first obtaining the consent in writing of the California Insurance
8 Commissioner in violation of California Insurance Code Section 1 2 1 5.2(a), (2) found that the factual
9 and legal conditions exist to conserve CIC pursuant to Insurance Code section 1 01 1, subdivision (c),
10 and (3) established good cause to believe that the State of California would be prejudiced were it to
11 provide respondent advanced notice of this proceeding in that CIC has within its authority power to at
12 any time complete the ostensible consummation of the transaction, which would have the effect of at
13 least forfeiting CIC's certificate of authority, rendering California policyholders ostensibly insured by
14 an out-of-state insurer without authority to transact insurance in California; and good cause appearing,
15 IT IS HEREBY ORDERED that:
16 1. The California Insurance Commissioner is hereby appointed as the Conservator of CIC
17 pursuant to section 1 0 1 1, and is directed to conduct the business of CIC or so much thereof as he may
18 deem appropriate, to pay or defer payment of all proper claims and obligations against CIC accruing
19 prior to or subsequent to his appointment as Conservator, and to act in all ways and exercise all powers
20 necessary or appropriate for the purpose of carrying out this order.
21 2. CIC, its officers, directors, agents and employees and any person that acts or purports to
22 act on its behalf of any of the foregoing shall be enjoined from taking any actions or filing any
23 document with any governmental entity or any governmental subdivision necessary to consummate
24 the merger of CIC into and with CIC II, to otherwise transfer the domicile of CIC from California to
25 New Mexico, or to otherwise adversely affect the California Certificate of Authority of CIC.
26 3. David E. Wilson, Special Deputy Insurance Commissioner, is appointed as Deputy
27 Conservator empowered to carry out any and all duties and exercise the authority of the Conservator
28 granted herein and the Insurance Code. Joseph B. Holloway, Jr. is appointed as Conservation
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1 Manager and Scott Pearce is appointed as Conservation Supervisor empowered to carry out any and all
2 duties and exercise the authority of the Conservator and Deputy Conservator. and as may be delegated
3 by the Conservator and Deputy Conservator.
4 4. The Conservator's immunity and related protections from claims, suits or liability
5 under applicable law, including but not limited to Government Code section 820.2, shall apply equally
6 to the Deputy Conservator, Conservation Manager and the Conservation Supervisor in their capacities
7 as Receiver of CIC, their successors in office, the Conservation & Liquidation Office ("CLO"), and
8 their agents and employees.
9 5. The Commissioner as Conservator is authorized to appoint and employ special
10 deputies, estate managers, other professionals, clerks and assistants and to give each of them such
11 power and authority as he may deem necessary and authorizing the Commissioner as Conservator to
12 compensate these persons from the assets of CIC as he may deem appropriate.
13 6. The Conservator is authorized to assist CIC in addressing their Form A deficiencies
14 with the goal of obtaining Form A approval and settlement of disputes with CDI.
15 7. CIC is ordered, except upon the express written authorization of the Conservator, not to
16 cancel or otherwise terminate or attempt to cancel or terminate any insurance policy or contract in-
17 force as of the date of this Order, and is ordered to continue to administer such in-force policies and
18 contracts in the ordinary course consistent with past practices.
19 8. Except as otherwise determined by the Conservator in his or her discretion, any
20 contract or agreement to provide administrative, claims, or other management services to CIC
21 necessary or appropriate for the efficient operations of CIC during the pendency of the conservation
22 shall remain in full force and effect unless rejected, modified or terminated by the Conservator in
23 writing, and unless directed otherwise by the Conservator, each such person or entity shall continue to
24 perform its respective obligations under such contract or agreement during the pendency of the
25 conservation consistent with past practice.
26 9. The Conservator is authorized, in his or her discretion, to pay or defer payment of some
27 or all proper claims, expenses. liabilities, and obligations of CIC, in whole or in part, accruing prior or
28 subsequent to his appointment as Conservator.
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(PROPOSED] ORDER APPOINTING INSURANCE COMNIISSIONFR AC CONCFR vArna ANn RFCTR A miNn rip nrac•
1 10. The Conservator is authorized to assume, reject, or modify any executory contracts
'7 including. without limitation. any lease, rental or utilization contract or agreement (including any
3 schedule to any such contract or agreement), and any license or other arrangement for the use of
4 computer software of business information systems, to which CIC is a party or as to which CIC agrees
to accept an assignment of such contract.
6 11. The Conservator is authorized in his or her discretion to take possession of any and all
7 assets of CIC, including books, records, property (both real and personal), accounts, safe deposit
8 boxes. rights of action, and all such assets as may be in the name of CIC, wheresoever situated.
9 12. Title to all property and assets of CIC, designated by the Conservator in his or her
10 discretion. including deposits, securities, contracts, rights of actions, books, records, and other assets
11 of every type and nature, and including both those presently in CIC's possession and those that may be
12 discovered hereafter. wheresoever situated, that are necessary or appropriate for the orderly
13 conservation of CIC is to be vested in the Conservator or his or her successor in office, in his official
14 capacity as Conservator. The Conservator is authorized to deal with such assets in his or her own
15 name as Conservator or in the name of CIC, and all persons are enjoined from interfering with
16 Conservator's possession and title to such assets.
17 13. The Conservator is authorized to maintain and invest such of CIC's assets and funds in
18 such a manner as the Conservator determines in his or her discretion is in the best interest of CIC's
19 creditors.
20 14. The Conservator is authorized to exercise all the powers of the directors, officers, and
21 managers of CIC, necessary or appropriate for the orderly conservation of CIC whose authorities are
22 suspended except as such powers may be redelegated to them in writing by the Conservator.
2.3 15. CIC, its officers, directors, agents, and employees are enjoined, except upon the express
24 written authorization of the Conservator or as is necessary to continue to administer in the ordinary
25 course consistent with past practices any in-force insurance policies as of the date of this Order, from
26 transacting any of the business of CIC, whether in the State of California or otherwise, disposing of,
27 using_ transferring, selling, assigning, canceling, alienating, hypothecating. or concealing in any
28 manner or any way, or assisting any person in any of the foregoing. the property or assets of CIC, or
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1 property or assets in the possession of CIC, of any nature or kind; including claims or causes of action,
2 until further order of the Court. Further, such persons are enjoined from obstructing or interfering with
3 the Conservator's conduct of his or her duties as Conservator.
4 16. CIC and its officers, directors, agents and employees are enjoined from issuing any new
5 or renewing any insurance policies except upon the written consent of the Conservator.
6 17. All persons are enjoined, except upon the written consent of the Conservator, from
7 instituting, prosecuting, or maintaining any action at law or suit in equity, including but not limited to,
8 actions or proceedings to compel discovery or production of documents or testimony, and matters in
9 arbitration, except for matters before the California Workers' Compensation Appeals Board or
10 equivalent administrative boards in other states, against CIC, or against the Conservator, and from
11 attaching, executing upon, redeeming of or taking any other legal proceedings against any of the
12 property of CIC, and from doing any act interfering with the conduct of said business by the
13 Conservator, except after an order of this Court obtained after reasonable notice to the Conservator.
14 18. CIC and all officers, directors, agents, employees, successors, assigns, affiliates of CIC,
15 and other persons acting in concert or participation with CIC shall deliver to and immediately make
16 available to the Conservator those assets, books, records, accounts, records, information, computers,
17 tapes, discs, writings, other recordings of information, equipment, and other property of CIC,
18 wheresoever situated, in said persons' custody or control specified in writing by the Conservator, and
19 further, the aforesaid persons shall disclose verbally, or in writing if requested by the Conservator, the
20 exact whereabouts of the foregoing items if such items are not in the possession custody, or control of
21 said persons.
22 19. All officers, directors, trustees, employees, or agents of CIC, or any other person, firm,
23 association, partnership, corporate parent, holding company, affiliate, or other entity in charge of any
24 aspect of CIC's affairs, either in whole or in part, and including but not limited to banks, savings and
25 loan associations, financial or lending institutions, brokers, stock or mutual associations, or any parent,
26 holding company, subsidiary or affiliated corporation, or any other representative acting in concert
27 with CIC, shall cooperate with the Conservator in the performance of his or her duties.
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[PROPOSED] ORDER APPOINTING INSURANCE COMMISSIONER AS CONSERVATOR AND RESTRAINING ORDERS;
1 20. The Conservator is authorized to pay all reasonable costs of taking possession of and
2 conserving CIC (including but not limited to the Conservator's pre-conservation costs in examining
3 CIC's financial condition, and preparing to take possession and conserve CIC, and the attorneys' fees
4 and costs incurred by the Commissioner in bringing and prosecuting this proceeding) out of the funds
5 and assets of CIC.
6 21. The Conservator is authorized to pay all reasonable costs of operating CIC as
7 Conservator (including direct and allocated direct costs, direct and allocated general and
8 administrative costs and overhead, and all other allocated costs) out of any and all funds and assets of
9 CIC, and if there are insufficient funds, to pay for the costs out of the Insurance Fund pursuant to
10 Insurance Code section 1035.
11 22. All persons who maintain records for CIC, pursuant to written contract or any other
12 agreement, shall maintain such records and deliver to the Conservator such records upon his request.
13 23. All agents of CIC, and all brokers who have done business with CIC, shall make
14 remittances of all funds collected by them or in their hands designated by the Conservator in his or her
15 discretion, directly to the Conservator.
16 24. All persons having possession of any lists of policyholders of CIC shall deliver such
17 lists to the Conservator upon his or her written request and enjoining all such persons from using any
18 such lists or any information contained therein without the written consent of the Conservator.
19 25. The Conservator is authorized to initiate such equitable or legal actions or proceedings
20 in this or other states that the Conservator determines is in his or her discretion are necessary to carry
21 out his or her functions as Conservator.
22 26. CIC, its officers, directors, agents and employees are enjoined from disposing of, or
23 assisting any person in the transfer or alienation of, the property or assets of CIC, until further order of
24 this Court.
25 27. All persons are enjoined, except with leave of this Court issued after a hearing in which
26 the Conservator has received reasonable notice, from obtaining preferences, judgments, attachments,
27 or other liens, or making any levy against CIC or its assets or property, and from executing or issuing
28 or causing the execution or issuance of any court attachment, subpoena, replevin, execution, or other
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1 process, for the purpose of impounding or taking possession of or interfering with or creating or
2 enforcing a lien upon any property or assets owned or in the possession of CIC or the Conservator,
3 wheresoever situated, and from doing any act interfering with the conduct of said business by
4 Conservator.
5 28. All persons are enjoined, except with leave of this Court issued after a hearing in which
6 Conservator has received reasonable notice, from accelerating the due date of any obligation or
7 claimed obligation; exercising any right of set-off; taking, retaining, retaking. or attempting to retake
8 possession of any real or personal property; withholding or diverting any rent or other obligation;
9 doing any act or other thing whatsoever to interfere with the possession of or management by the
10 Conservator of the property and assets, owned or controlled by CIC or in the possession of CIC, or in
11 any way interfering with the Conservator or interfering in any manner during the pendency of this
12 proceeding with the exclusive jurisdiction of this Court over CIC.
13 29. Any and all provisions of any agreement entered into by and between any third party
14 and CIC that provide in any manner that selection, appointment, or retention of a conservator, receiver,
15 or trustee by any court, or entry of any order such as hereby made, shall be deemed to be or otherwise
16 operate as a breach, violation, event of default, termination, event of dissolution, event of acceleration,
17 insolvency, bankruptcy, or liquidation, shall be stayed, and the assertion of any and all rights and
18 remedies relating thereto shall also be stayed and barred, except as otherwise ordered by this Court.
19 This Court shall retain jurisdiction over any cause of action that has arisen or may otherwise arise
20 under any such provision.
21 30. All persons are enjoined from wasting the assets of CIC.
22 IT IS SO ORDERED.
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24 Dated: November V , 2019 JUDGE THE SUPERIOR COURT
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GEORGE A. MIRAM
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I PRnPosFnl OFR A PPOINTIM1 NS' IR Aw-F rnk,wiscinNFp AS r(lNICFRv A -rnp Axin RFCTR ‘IVIN'r; nD nco
c•
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F CALIFORNIA 1
OF SAN MATE01 SS.
I Taniguchi, the Cleric of the Superior Court of the above
entitled County, do hereby certify that the foregoing is a full, true
end correct copy of the anginal on file in my office, and that I have
carefully compared same with the original.
64 2019
Witness my hand end seal of said lie
&
Thh
Clerk of tho
erl urt of California, County of San Mateo
By Deputy Clerk
TISO•••••,.••••••••
1 PROOF OF SERVICE
2 I am over the age of eighteen years and not a party to the within-entitled action. My
3 business address is Orrick, Herrington & Sutcliffe LLP, 400 Capitol Mall, Suite 3000,
4 Sacramento, CA 95814. On November 19, 2019, I served the following document(s):
5 ORDER APPOINTING COMMISSIONER AS CONSERVATOR OF
CALIFORNIA INSURANCE COMPANY AND ENJOINING
6
PROCEEDINGS [INSURANCE CODE §1020]
7 on the interested parties in this action by placing true and correct copies thereof in sealed
8 envelope(s) addressed as follows as well as by email:
9 By Mail and Email
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Spencer Y. Kook (SBN 205304)
11 HINSHAW & CULBERTSON LLP
633 West 5th Street, 47th Floor
12 Los Angeles, CA 90071-2043
Tele: 213-680-2800
13
skook@mail.hinshawlaw.com
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Larry Lichtenegger
15 Attorney at Law
3850 Rio Road, #58
16 Carmel, California 93923
Tele: (831) 626-2801
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larry@ljllaw.com
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I am employed in the county from which the mailing occurred. On the date indicated
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above, I placed the sealed envelope(s) for collection and mailing at this firm's office business
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address indicated above. I am readily familiar with this firm's practice for the collection and
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processing of correspondence for mailing with the United States Postal Service. Under that
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practice, the firm's correspondence would be deposited with the United States Postal Service on
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this same date with postage thereon fully prepaid in the ordinary course of business.
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ORDER APPOINTING COMMISSIONER AS CONSERATOR OF CIC
AND ENJOINING PROCEEDINGS [INSURANCE CODE §1020]
1 Executed on November 19, 2019 at Sacramento, California.
2 I declare under penalty of perjury under the laws of the State of California that the above
3 is true and correct.
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IA3-6,49,_ Wanda Peters
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ORDER APPOINTING COMMISSIONER AS CONSERATOR OF CIC
AND ENJOINING PROCEEDINGS [INSURANCE CODE §1020]
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1 CYNTHIA J. LARSEN (STATE BAR NO. 123994) ELECTRONICALLY clarsen@orrick.com F I L E D 2 JUSTIN GIOVANNETTONE (STATE BAR NO. 293794) Superior Court of California, County of San Francisco jgiovannettone@orrick.com 3 ORRICK, HERRINGTON & SUTCLIFFE LLP 11/19/2019 400 Capitol Mall, Suite 3000 Clerk of the Court 4 Sacramento, CA 95814-4497 BY: ERNALYN BURA Deputy Clerk Telephone: +1 916 447 9200 5 Facsimile: +1 916 329 4900 6 Attorneys for Insurance Commissioner EXEMPT from filing fees per in his capacity as Conservator of Govt. Code § 6103 7 California Insurance Company 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF SAN FRANCISCO 10 11 WARWICK AMUSEMENTS CASE NO. CGC-16-551614 12 CORPORATION, et al. NOTICE OF ORDER APPOINTING 13 Plaintiffs, COMMISSIONER AS CONSERVATOR OF CALIFORNIA INSURANCE 14 vs. COMPANY AND ENJOINING PROCEEDINGS [INSURANCE CODE 15 APPLIED UNDERWRITERS, INC., et al. §1020] 16 Defendants. 17 PLEASE TAKE NOTICE that California Insurance Company ("CIC") has been placed 18 into conservation pursuant to the provisions of California Insurance Code sections 1010, et seq. 19 by the Superior Court for San Mateo County ("Conservation Court") which has exclusive 20 jurisdiction over all matters relating to the conservation of CIC. Pursuant to Insurance Code 21 §§ 1011 and 1020 and the November 4, 2019 Order: (1) Appointing Conservator and 22 (2) Restraining Specific Activities ("Conservation Order"), the California Insurance 23 Commissioner has been appointed the Conservator of CIC and the institution, prosecuting or 24 maintenance of lawsuits and arbitrations (except before the California Workers' Compensation 25 Appeals Board or equivalent administrative boards of other states) by any person or entity against 26 CIC or the Conservator, including the above-captioned arbitrations, are enjoined. 27 //// 28 ORDER APPOINTING COMMISSIONER AS CONSERATOR OF CIC AND ENJOINING PROCEEDINGS [INSURANCE CODE §1020] 1 A true and correct copy of the Conservation Order is attached hereto as Exhibit A. 2 3 Dated: November 19, 2019 CYNTHIA J. LARSEN 4 JUSTIN GIOVANNETTONE ORRICK, HERRINGTON & SUTCLIFFE LLP 5 6 By: 7 CYNTHIA J. LARSEN Attorneys for Insurance Commissioner 8 in his capacity as Conservator of California Insurance Company 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- ORDER APPOINTING COMMISSIONER AS CONSERATOR OF CIC AND ENJOINING PROCEEDINGS [INSURANCE CODE *1020] ENDOPSED FILED SAN MATEO 1 COUNTY NOV 0 4 2019 Clerk of the By Superior Court 3 RJa Dominic DEPUTY CLERK 4 6 Exempt from filing fees pursuant to 7 Government Code section 6103 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 FOR THE COUNTY OF SAN MATEO — UNLIMITED JURISDICTION 11 INSURANCE COMMISSIONER OF THE Case No. 19CIV06531 12 STATE OF CALIFORNIA, [PROPOSED] ORDER APPOINTING 13 INSURANCE COMMISSIONER AS Applicant, CONSERVATOR and RESTRAINING 14 ORDERS; v. 15 [Ins. Code, § 1011] CALIFORNIA INSURANCE COMPANY, a 16 California corporation, Date: November 4, 2019 17 Respondent. Time: 2:00 p.m. Dept.: 18 19 20 21 22 23 24 25 26 27 28 Printed on Recycled Paper 1PROPOSED1 ORDER APPOINTING INSURANCF CONIMISSIONFR AS CrINSFR VA-MR ANTI RFSTR (IQ ncoc• 1 WREW48.£-43] ORDER 2 The California Insurance Commissioner's Verified Ex Parte Application for Order Appointing 3 Conservator having been filed herein, it being shown to the Court's satisfaction from said Application 4 that the Commissioner has (1) found that California Insurance Company ("CIC"), a California 5 domiciled insurance company, entered into a transaction the effect of which, if consummated, would 6 merge CIC into and with California Insurance Company II ("CIC In, a New Mexico domiciled 7 insurance company without first obtaining the consent in writing of the California Insurance 8 Commissioner in violation of California Insurance Code Section 1 2 1 5.2(a), (2) found that the factual 9 and legal conditions exist to conserve CIC pursuant to Insurance Code section 1 01 1, subdivision (c), 10 and (3) established good cause to believe that the State of California would be prejudiced were it to 11 provide respondent advanced notice of this proceeding in that CIC has within its authority power to at 12 any time complete the ostensible consummation of the transaction, which would have the effect of at 13 least forfeiting CIC's certificate of authority, rendering California policyholders ostensibly insured by 14 an out-of-state insurer without authority to transact insurance in California; and good cause appearing, 15 IT IS HEREBY ORDERED that: 16 1. The California Insurance Commissioner is hereby appointed as the Conservator of CIC 17 pursuant to section 1 0 1 1, and is directed to conduct the business of CIC or so much thereof as he may 18 deem appropriate, to pay or defer payment of all proper claims and obligations against CIC accruing 19 prior to or subsequent to his appointment as Conservator, and to act in all ways and exercise all powers 20 necessary or appropriate for the purpose of carrying out this order. 21 2. CIC, its officers, directors, agents and employees and any person that acts or purports to 22 act on its behalf of any of the foregoing shall be enjoined from taking any actions or filing any 23 document with any governmental entity or any governmental subdivision necessary to consummate 24 the merger of CIC into and with CIC II, to otherwise transfer the domicile of CIC from California to 25 New Mexico, or to otherwise adversely affect the California Certificate of Authority of CIC. 26 3. David E. Wilson, Special Deputy Insurance Commissioner, is appointed as Deputy 27 Conservator empowered to carry out any and all duties and exercise the authority of the Conservator 28 granted herein and the Insurance Code. Joseph B. Holloway, Jr. is appointed as Conservation 2 Avoc Cr, Mononccril nonco d DonixiTtxtr. Ihica ID c. giccurshirn c rryorrn,/ -rnn 13 re, n I,I• 1'1 1 Manager and Scott Pearce is appointed as Conservation Supervisor empowered to carry out any and all 2 duties and exercise the authority of the Conservator and Deputy Conservator. and as may be delegated 3 by the Conservator and Deputy Conservator. 4 4. The Conservator's immunity and related protections from claims, suits or liability 5 under applicable law, including but not limited to Government Code section 820.2, shall apply equally 6 to the Deputy Conservator, Conservation Manager and the Conservation Supervisor in their capacities 7 as Receiver of CIC, their successors in office, the Conservation & Liquidation Office ("CLO"), and 8 their agents and employees. 9 5. The Commissioner as Conservator is authorized to appoint and employ special 10 deputies, estate managers, other professionals, clerks and assistants and to give each of them such 11 power and authority as he may deem necessary and authorizing the Commissioner as Conservator to 12 compensate these persons from the assets of CIC as he may deem appropriate. 13 6. The Conservator is authorized to assist CIC in addressing their Form A deficiencies 14 with the goal of obtaining Form A approval and settlement of disputes with CDI. 15 7. CIC is ordered, except upon the express written authorization of the Conservator, not to 16 cancel or otherwise terminate or attempt to cancel or terminate any insurance policy or contract in- 17 force as of the date of this Order, and is ordered to continue to administer such in-force policies and 18 contracts in the ordinary course consistent with past practices. 19 8. Except as otherwise determined by the Conservator in his or her discretion, any 20 contract or agreement to provide administrative, claims, or other management services to CIC 21 necessary or appropriate for the efficient operations of CIC during the pendency of the conservation 22 shall remain in full force and effect unless rejected, modified or terminated by the Conservator in 23 writing, and unless directed otherwise by the Conservator, each such person or entity shall continue to 24 perform its respective obligations under such contract or agreement during the pendency of the 25 conservation consistent with past practice. 26 9. The Conservator is authorized, in his or her discretion, to pay or defer payment of some 27 or all proper claims, expenses. liabilities, and obligations of CIC, in whole or in part, accruing prior or 28 subsequent to his appointment as Conservator. 3 (PROPOSED] ORDER APPOINTING INSURANCE COMNIISSIONFR AC CONCFR vArna ANn RFCTR A miNn rip nrac• 1 10. The Conservator is authorized to assume, reject, or modify any executory contracts '7 including. without limitation. any lease, rental or utilization contract or agreement (including any 3 schedule to any such contract or agreement), and any license or other arrangement for the use of 4 computer software of business information systems, to which CIC is a party or as to which CIC agrees to accept an assignment of such contract. 6 11. The Conservator is authorized in his or her discretion to take possession of any and all 7 assets of CIC, including books, records, property (both real and personal), accounts, safe deposit 8 boxes. rights of action, and all such assets as may be in the name of CIC, wheresoever situated. 9 12. Title to all property and assets of CIC, designated by the Conservator in his or her 10 discretion. including deposits, securities, contracts, rights of actions, books, records, and other assets 11 of every type and nature, and including both those presently in CIC's possession and those that may be 12 discovered hereafter. wheresoever situated, that are necessary or appropriate for the orderly 13 conservation of CIC is to be vested in the Conservator or his or her successor in office, in his official 14 capacity as Conservator. The Conservator is authorized to deal with such assets in his or her own 15 name as Conservator or in the name of CIC, and all persons are enjoined from interfering with 16 Conservator's possession and title to such assets. 17 13. The Conservator is authorized to maintain and invest such of CIC's assets and funds in 18 such a manner as the Conservator determines in his or her discretion is in the best interest of CIC's 19 creditors. 20 14. The Conservator is authorized to exercise all the powers of the directors, officers, and 21 managers of CIC, necessary or appropriate for the orderly conservation of CIC whose authorities are 22 suspended except as such powers may be redelegated to them in writing by the Conservator. 2.3 15. CIC, its officers, directors, agents, and employees are enjoined, except upon the express 24 written authorization of the Conservator or as is necessary to continue to administer in the ordinary 25 course consistent with past practices any in-force insurance policies as of the date of this Order, from 26 transacting any of the business of CIC, whether in the State of California or otherwise, disposing of, 27 using_ transferring, selling, assigning, canceling, alienating, hypothecating. or concealing in any 28 manner or any way, or assisting any person in any of the foregoing. the property or assets of CIC, or 4 fppnpncpni no I-1FR A PPrilTITIX111 ANDP re"1%.4 \ SIC:Cinx.ro A C -rnn •• nD ev-rn nwon !Inr-Nr-nr. 1 property or assets in the possession of CIC, of any nature or kind; including claims or causes of action, 2 until further order of the Court. Further, such persons are enjoined from obstructing or interfering with 3 the Conservator's conduct of his or her duties as Conservator. 4 16. CIC and its officers, directors, agents and employees are enjoined from issuing any new 5 or renewing any insurance policies except upon the written consent of the Conservator. 6 17. All persons are enjoined, except upon the written consent of the Conservator, from 7 instituting, prosecuting, or maintaining any action at law or suit in equity, including but not limited to, 8 actions or proceedings to compel discovery or production of documents or testimony, and matters in 9 arbitration, except for matters before the California Workers' Compensation Appeals Board or 10 equivalent administrative boards in other states, against CIC, or against the Conservator, and from 11 attaching, executing upon, redeeming of or taking any other legal proceedings against any of the 12 property of CIC, and from doing any act interfering with the conduct of said business by the 13 Conservator, except after an order of this Court obtained after reasonable notice to the Conservator. 14 18. CIC and all officers, directors, agents, employees, successors, assigns, affiliates of CIC, 15 and other persons acting in concert or participation with CIC shall deliver to and immediately make 16 available to the Conservator those assets, books, records, accounts, records, information, computers, 17 tapes, discs, writings, other recordings of information, equipment, and other property of CIC, 18 wheresoever situated, in said persons' custody or control specified in writing by the Conservator, and 19 further, the aforesaid persons shall disclose verbally, or in writing if requested by the Conservator, the 20 exact whereabouts of the foregoing items if such items are not in the possession custody, or control of 21 said persons. 22 19. All officers, directors, trustees, employees, or agents of CIC, or any other person, firm, 23 association, partnership, corporate parent, holding company, affiliate, or other entity in charge of any 24 aspect of CIC's affairs, either in whole or in part, and including but not limited to banks, savings and 25 loan associations, financial or lending institutions, brokers, stock or mutual associations, or any parent, 26 holding company, subsidiary or affiliated corporation, or any other representative acting in concert 27 with CIC, shall cooperate with the Conservator in the performance of his or her duties. 28 5 [PROPOSED] ORDER APPOINTING INSURANCE COMMISSIONER AS CONSERVATOR AND RESTRAINING ORDERS; 1 20. The Conservator is authorized to pay all reasonable costs of taking possession of and 2 conserving CIC (including but not limited to the Conservator's pre-conservation costs in examining 3 CIC's financial condition, and preparing to take possession and conserve CIC, and the attorneys' fees 4 and costs incurred by the Commissioner in bringing and prosecuting this proceeding) out of the funds 5 and assets of CIC. 6 21. The Conservator is authorized to pay all reasonable costs of operating CIC as 7 Conservator (including direct and allocated direct costs, direct and allocated general and 8 administrative costs and overhead, and all other allocated costs) out of any and all funds and assets of 9 CIC, and if there are insufficient funds, to pay for the costs out of the Insurance Fund pursuant to 10 Insurance Code section 1035. 11 22. All persons who maintain records for CIC, pursuant to written contract or any other 12 agreement, shall maintain such records and deliver to the Conservator such records upon his request. 13 23. All agents of CIC, and all brokers who have done business with CIC, shall make 14 remittances of all funds collected by them or in their hands designated by the Conservator in his or her 15 discretion, directly to the Conservator. 16 24. All persons having possession of any lists of policyholders of CIC shall deliver such 17 lists to the Conservator upon his or her written request and enjoining all such persons from using any 18 such lists or any information contained therein without the written consent of the Conservator. 19 25. The Conservator is authorized to initiate such equitable or legal actions or proceedings 20 in this or other states that the Conservator determines is in his or her discretion are necessary to carry 21 out his or her functions as Conservator. 22 26. CIC, its officers, directors, agents and employees are enjoined from disposing of, or 23 assisting any person in the transfer or alienation of, the property or assets of CIC, until further order of 24 this Court. 25 27. All persons are enjoined, except with leave of this Court issued after a hearing in which 26 the Conservator has received reasonable notice, from obtaining preferences, judgments, attachments, 27 or other liens, or making any levy against CIC or its assets or property, and from executing or issuing 28 or causing the execution or issuance of any court attachment, subpoena, replevin, execution, or other 6 fpRopncFni oR rWR A PPC11 \ITINC; INS! 'R ANrF ervouiccunt,rn ec CrIN'cP0 yeTno A vn P CCTO thivor: nnnrnr. 1 process, for the purpose of impounding or taking possession of or interfering with or creating or 2 enforcing a lien upon any property or assets owned or in the possession of CIC or the Conservator, 3 wheresoever situated, and from doing any act interfering with the conduct of said business by 4 Conservator. 5 28. All persons are enjoined, except with leave of this Court issued after a hearing in which 6 Conservator has received reasonable notice, from accelerating the due date of any obligation or 7 claimed obligation; exercising any right of set-off; taking, retaining, retaking. or attempting to retake 8 possession of any real or personal property; withholding or diverting any rent or other obligation; 9 doing any act or other thing whatsoever to interfere with the possession of or management by the 10 Conservator of the property and assets, owned or controlled by CIC or in the possession of CIC, or in 11 any way interfering with the Conservator or interfering in any manner during the pendency of this 12 proceeding with the exclusive jurisdiction of this Court over CIC. 13 29. Any and all provisions of any agreement entered into by and between any third party 14 and CIC that provide in any manner that selection, appointment, or retention of a conservator, receiver, 15 or trustee by any court, or entry of any order such as hereby made, shall be deemed to be or otherwise 16 operate as a breach, violation, event of default, termination, event of dissolution, event of acceleration, 17 insolvency, bankruptcy, or liquidation, shall be stayed, and the assertion of any and all rights and 18 remedies relating thereto shall also be stayed and barred, except as otherwise ordered by this Court. 19 This Court shall retain jurisdiction over any cause of action that has arisen or may otherwise arise 20 under any such provision. 21 30. All persons are enjoined from wasting the assets of CIC. 22 IT IS SO ORDERED. 23 24 Dated: November V , 2019 JUDGE THE SUPERIOR COURT 25 GEORGE A. MIRAM 26 27• 28 7 I PRnPosFnl OFR A PPOINTIM1 NS' IR Aw-F rnk,wiscinNFp AS r(lNICFRv A -rnp Axin RFCTR ‘IVIN'r; nD nco c• * F CALIFORNIA 1 OF SAN MATE01 SS. I Taniguchi, the Cleric of the Superior Court of the above entitled County, do hereby certify that the foregoing is a full, true end correct copy of the anginal on file in my office, and that I have carefully compared same with the original. 64 2019 Witness my hand end seal of said lie & Thh Clerk of tho erl urt of California, County of San Mateo By Deputy Clerk TISO•••••,.•••••••• 1 PROOF OF SERVICE 2 I am over the age of eighteen years and not a party to the within-entitled action. My 3 business address is Orrick, Herrington & Sutcliffe LLP, 400 Capitol Mall, Suite 3000, 4 Sacramento, CA 95814. On November 19, 2019, I served the following document(s): 5 ORDER APPOINTING COMMISSIONER AS CONSERVATOR OF CALIFORNIA INSURANCE COMPANY AND ENJOINING 6 PROCEEDINGS [INSURANCE CODE §1020] 7 on the interested parties in this action by placing true and correct copies thereof in sealed 8 envelope(s) addressed as follows as well as by email: 9 By Mail and Email 10 Spencer Y. Kook (SBN 205304) 11 HINSHAW & CULBERTSON LLP 633 West 5th Street, 47th Floor 12 Los Angeles, CA 90071-2043 Tele: 213-680-2800 13 skook@mail.hinshawlaw.com 14 Larry Lichtenegger 15 Attorney at Law 3850 Rio Road, #58 16 Carmel, California 93923 Tele: (831) 626-2801 17 larry@ljllaw.com 18 I am employed in the county from which the mailing occurred. On the date indicated 19 above, I placed the sealed envelope(s) for collection and mailing at this firm's office business 20 address indicated above. I am readily familiar with this firm's practice for the collection and 21 processing of correspondence for mailing with the United States Postal Service. Under that 22 practice, the firm's correspondence would be deposited with the United States Postal Service on 23 this same date with postage thereon fully prepaid in the ordinary course of business. 24 25 26 27 28 -3- ORDER APPOINTING COMMISSIONER AS CONSERATOR OF CIC AND ENJOINING PROCEEDINGS [INSURANCE CODE §1020] 1 Executed on November 19, 2019 at Sacramento, California. 2 I declare under penalty of perjury under the laws of the State of California that the above 3 is true and correct. 4 5 IA3-6,49,_ Wanda Peters 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- ORDER APPOINTING COMMISSIONER AS CONSERATOR OF CIC AND ENJOINING PROCEEDINGS [INSURANCE CODE §1020]