A. AMERCO and SAC Holdings

EX-10.69 10 p67969exv10w69.txt EX-10.69 Exhibit 10.69 STATE OF ARIZONA DEPARTMENT OF INSURANCE In the Matter of DOCKET NO. 03A-098-INS REPUBLIC WESTERN NOTICE OF DETERMINATION, INSURANCE COMPANY ORDER FOR SUPERVISION (NAIC NO. 31089) AND CONSENT THERETO Respondent. - ------------------------------------ The State of Arizona, Department of Insurance (the "Department"), has received evidence that Republic Western Insurance Company ("Respondent") is out of compliance with the provisions of Arizona Revised Statutes ("A.R.S."), Title 20. Respondent wishes to resolve this matter without the commencement of contested proceedings, and admits the following Findings of Fact are true and consents to the entry of the following Conclusions of Law and Order. FINDINGS OF FACT 1. Respondent Republic Western Insurance Company is domiciled in Arizona and presently holds a certificate of authority issued by the Department to transact property, casualty with workers' compensation, disability, marine and transportation, surety and vehicle insurance. 2. Respondent is a wholly-owned subsidiary of AMERCO, a publicly owned and traded holding company. AMERCO defaulted on the payment of approximately $130 million in senior debt obligations in October 2002, and according to its public filings is, in the aggregate, directly or indirectly as a result of technical cross-defaults, in default on approximately $1.2 billion of obligations. 3. The Director performed a limited scope examination of Respondent as of December 31, 2002, pursuant to Title 20, to ascertain the nature and extent of affiliate exposures, confirm that affiliated assets and liabilities are reported in accordance with Statutory Accounting Practices, and evaluate the impact on Respondent's financial condition should AMERCO's debt default damage its ability to fulfill obligations to Respondent. 4. Based upon the Director's Report of Examination dated May 1, 2003, filed in accordance with A.R.S. Section 20-158 and A.A.C. R20-6-1704, the Respondent has consented to the entry of this Consent Order. 5. The Director is exercising his authority under A.R.S. Section 20-158 to withhold the Report of Examination from public inspection. This does not preclude Respondent from making the Report of Examination available to any person. The Director may release the Report of Examination for public inspection at any time. CONCLUSIONS OF LAW 1. The Director has jurisdiction over this matter. 2. Grounds exist for the Director to place the Respondent under supervision of the Department in accordance with A.R.S. Section 20-169. ORDER IT IS ORDERED: 1. Respondent is hereby notified of the determination of the Director to place Respondent under the supervision of the Department in accordance with A.R.S. Section 20-169. 2. Respondent is hereby under the supervision of the Director and the Director is applying and effectuating the provisions of Article 2, Chapter 1, Title 20, Arizona Revised Statutes. 3. The requirements to abate the Director's determination are that: a. Respondent shall establish that it has eliminated the specific credit risk associated with the exposures to AMERCO and its affiliates identified in the Report of Examination. - 2 - b. Respondent shall establish that it possesses surplus sufficient to comply with A.R.S. Section 20-488.01(F) and as the Director may require based on the type, volume or nature of its business pursuant to A.R.S. Section 20-211. 4. Pursuant to A.R.S. Section 20-170, the Director hereby appoints Examination Supervisor Rodney B. Frantz, CPA, as Supervisor of Respondent. 5. Pursuant to A.R.S. Section 20-170, the Director orders that Respondent, during the period of Supervision, may not do any of the following things without the prior approval of the Director or his Supervisor: a. dispose of, convey or encumber any of its assets or its business in force; b. withdraw any of its bank accounts; c. lend any of its funds; d. invest any of its funds; e. transfer any of its property; f. incur any debt, obligation or liability including the insurance of all new and renewal business; g. merge or consolidate with another company; h. enter into any new reinsurance contract or treaty; or i. enter into any affiliate transactions. 6. If Respondent fails to satisfy the requirements to abate the Director's determination within sixty (60) days from the date hereof, the Director may take appropriate action including but not limited to commencing a conservatorship pursuant to A.R.S. Section 20-171. 7. Pursuant to A.R.S. Section 20-171(C), the costs incident to the services of the Director, or his Supervisor, or both, shall be charged against the assets and funds of Respondent and shall be paid when fixed and determined by the Director. - 3 - EFFECTIVE this 20th day of May, 2003. /s/ Charles R. Cohen ------------------------------------- CHARLES R. COHEN Director of Insurance CONSENT TO ORDER 1. Respondent has reviewed the foregoing Findings of Fact, Conclusions of Law and Order. 2. Respondent admits the jurisdiction of the Director of Insurance, State of Arizona, and admits the foregoing Findings of Fact and consents to the entry of the foregoing Conclusions of Law and Order. 3. Respondent is aware of its right to notice and a hearing at which it may be represented by counsel, present evidence and cross-examine witnesses. Respondent irrevocably waives its right to such notice and hearing and to any court appeals relating to this Consent Order. 4. Respondent states that no promise of any kind or nature whatsoever, except as expressly contained in this Consent Order, was made to it to induce it to enter into this Consent Order and that it has entered into this Consent Order voluntarily. 5. Respondent acknowledges that the purpose of this Consent Order is solely to enter the Order herein and does not preclude any agency, officer or subdivision of this State from instituting such administrative, civil or criminal proceedings as may be appropriate at any time. 6. Respondent acknowledges that nothing herein precludes the Department from taking any appropriate regulatory action at any time, including but not limited to initiation of delinquency proceedings. 7. Respondent attests that Richard M. Amoroso is the President of Respondent and is authorized to execute this Consent Order on behalf of Respondent. - 4 - REPUBLIC WESTERN INSURANCE COMPANY /s/ Richard M. Amoroso ------------------------------------- By: Richard M. Amoroso Its: President May 20, 2003 - -------------------------- Date COPY of the foregoing mailed/hand-delivered this 20th day of May, 2003, to: Richard M. Amoroso President Republic Western Insurance Company 272l N. Central Avenue Phoenix, Arizona 85004 J. Michael Low Low & Childers 2999 N. 44th Street, Suite 250 Phoenix, Arizona 85018 Michael E. Surguine Executive Director Arizona Property and Casualty Insurance Guaranty Fund Arizona Life and Disability Insurance Guaranty Fund 1110 W. Washington, Suite 270 Phoenix, Arizona 85007 Rodney B. Frantz, Examination Supervisor Sara Begley, Deputy Director Steve Ferguson, Assistant Director Deloris Williamson, Assistant Director Paul Hogan, Market Conduct Chief Examiner Kurt Regner, Chief Financial Analyst Leslie Hess, Financial Affairs Legal Analyst Arizona Department of Insurance 2910 N. 44th Street, Second Floor Phoenix, Arizona 85018 - 5 - Jennifer Boucek Assistant Attorney General Arizona Attorney General's Office 1275 West Washington Phoenix, Arizona 85007 /s/ Curvey Walters Burton - ------------------------------- Curvey Walters Burton Donahem\PHX\1378745.1 - 6 -