Please take notice that on the 30^th day of December, 2005, at the hour of 8:30 a.m., or as soon thereafter as the matter may be heard, John Garamendi, Insurance Commissioner of the State of California, in his capacity as Trustee of the Mission Insurance Company Trust and the Mission National Insurance Company Trust, shall appear in Department 50 of the Los Angeles Superior Court, and present his Motion to Approve Distribution and Accounting.

The motion requests approval of the accounting of the Mission Insurance Company Trust and the Mission National Insurance Company Trust, and an order which discharges the Insurance Commissioner as to the matters to which the accounting relates.

The motion requests authorization to distribute to policyholder priority class creditors of Mission Insurance Company Trust and Mission National Insurance Company Trust an amount sufficient to bring each of these claimants up to one hundred percent of their principal claims.

The motion requests authorization to distribute to general creditors of Mission Insurance Company Trust an amount equal to thirty percent (30%) of the principal amount of their claims. This motion requests authorization to distribute to general creditors of Mission National Insurance Company Trust an amount equal to one hundred percent (100%) of the principal amount of their claims. General creditors are receiving distributions of principal pursuant to Section 1033 of the Insurance Code as it applied as of the time of this liquidation.

This motion further requests an order which authorizes all remaining sums in the trusts to be retained in the trust pending distribution at a future date. The purpose of this reserve is to allow for the passage of time such that all unforeseen contingencies, including tax contingencies, shall be reserved for, while ensuring that the unexpended assets will be distributed subsequently.

As of this writing, a single order to show cause proceeding remains pending, having been filed by Industrial Indemnity. If the matter requires a full hearing, then the funds reserved should suffice as a reserve to provide funds to deal with this matter.

The motion is supported by Declarations of Raymond Minehan, of John Battle, and of Mohsen Sultan, filed with the Evidentiary Submission submitted herewith, as well as the pleadings and papers on file in this action.

Wherefore, premises considered, this Court is requested to issue an order which:

1. approves the accounting, and discharges the Insurance Commissioner, individually and as Insurance Commissioner and Trustee, as the funds referenced in the accounting and the funds to be disbursed.
2. authorizes the distributions as set forth above.
3. authorizes the reserves as set forth above;

and all other just and equitable relief.

Respectfully submitted,

Memorandum of Points and Authorities

The Insurance Commissioner's case plan resulted in concrete effort to expedite the closing of these insurance insolvency trusts. This motion seeks the closing of the Mission Insurance Company Trust and the Mission National Insurance Company Trust. Mission Insurance Company and Mission National Insurance Company were placed into liquidation along with other Mission affiliates on February 24, 1987. The proof of claims deadline pursuant to California Insurance Code Section 1024 ran on September 12, 1987. The deadline to amend timely proofs of claim was August 18,1995.

The Declaration of Raymond Minehan establishes that enough assets exist to increase the policyholder distribution to one hundred percent (100%). In addition, general creditor distributions are recommended to be paid, as detailed in the motion. Mr. Minehan's declaration states that he does not address in the financial presentation the issue of "deficiency claims" under any agreement with Danielson Holding Corporation, now known as Covanta Holding Corporation. This matter, of importance only to the distribution of shares pursuant to the rehabilitation plan, will ultimately be addressed by separate motion.

A substantial reserve is set aside, to ensure that no unforeseen liabilities, including tax liabilities, arise. This reserve is detailed in the declaration of Raymond Minehan. The declaration of John Battle sets forth the claimants to whom distributions shall be made.

California Insurance Code Section 1037 provides that the Insurance Commissioner shall have the right and duty to manage the liquidation of an insurance company as liquidator. Here, the Court has previously authorized the creation of the Mission Insurance Company Trust and the Mission National Insurance Company Trust. The Insurance Commissioner's discretion in the handling of these matters is broad. Low v. Golden Eagle Ins. Co., (2002) 104 Cal. App. 4th 306; 128 Cal. Rptr. 2d 423. Even a less deferential standard of review, however, would support the relief requested here-to distribute the money and discharge the Insurance Commissioner based on the accounting provided.

The time has come to pay one hundred percent distributions to policyholders, and to make a substantial dividend to general creditors. The general creditor dividend is paid pursuant to California Insurance Code Section 1033 (as it existed at the relevant date of liquidation), after payment of all policyholder principal claims. This Court is requested to approve this relief.

In this connection, substantial sums will be reserved for the unforeseen, which will be distributed later. The proposal is to distribute the recommended funds now, close the case subject to this Court's continued jurisdiction so that it may be reopened later for further distributions.

This Court should retain jurisdiction over the remaining order to show cause, and over any last asset collection matters, and the trust shall remain open. As the Declaration of Mohsen Sultan establishes, the time for a court case for quarterly administration has finally passed, and this Court is requested to approve this motion.

Respectfully submitted,

The Insurance Commissioner attaches as Exhibit "A" the Declaration of Raymond J. Minehan, as Exhibit "B" the Declaration of Mohsen Sultan, and as Exhibit "C" the Declaration of John Battle, as evidence to support the Motion to approve distribution and accounting as to Mission Insurance Company Trust and Mission National Insurance Company Trust now set on December 30,2005.