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EDMUND G. BROWN JR.
Attorney General of the State of California
W. DEAN FREEMAN
Supervising Deputy Attorney General
FELIX E. LEATHERWOOD
Supervising Deputy Attorneys General
MARLA K. MARKMAN, State Bar No. 77300
Deputy Attorney General
300 South Spring Street, Suite 1702
Los Angeles, CA 90013
Telephone: (213) 897-2491
Fax: (213) 897-5775
Attorneys for Applicant Insurance Commissioner
of the State of California, in his capacity as Liquidator
of Paula Insurance Company
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
INSURANCE COMMISSIONER OF THE STATE
OF CALIFORNIA,
Applicant,
v.
PAULA INSURANCE COMPANY
Respondent.
CASE NO.: BS 075685
ORDER
(1) SETTLING AND
APPROVING THE FINAL
REPORT AND ACCOUNT OF
THE LIQUIDATOR OF PAULA
INSURANCE COMPANY
(2) AUTHORIZING
DISBURSEMENT OF FUNDS
(3) APPROVING PAYMENT
OF EXPENSES; AND
(4) TERMINATING
LIQUIDATION PROCEEDING
AND DISCHARGING
INSURANCE COMMISSIONER
AS LIQUIDATOR
Hearing on the Insurance Commissioner of the State of California in his capacity as Liquidator of Paula Insurance Company Application for Orders (1) Settling and Approving the Final Report and Account of the Liquidator of Paula Insurance Company; (2) Authorizing Disbursement of Funds; (3) Approving Payment of Expenses; and (4) Terminating Liquidation Proceeding and Discharging Insurance Commissioner as Liquidator, came on regularly for hearing before the Honorable James C. Chalfant, Department 85 of the Los Angeles Superior Court,on September 5, 2008.
The Insurance Commissioner of the State of California in his capacity as Liquidator of Paula Insurance Company was represented by Edmund G. Brown Jr., Attorney General of the State of California, by Marla K. Markman, Deputy Attorney General. There were no other appearances.
The application having been duly noticed and good cause appearing therefor, is hereby granted.
IT IS HEREBY ORDERED that:
The Report and Account of Conservator and Liquidator for the period from April 26, 2002, through April 30, 2008, is settled and approved;
The Commissioner is authorized to apply an across-the-board five percent (5%) discount in calculating the present value of the claims reserves in order to determine the final approved claim for each of the nine IGAs, using the methodology as explained in Paragraph 27 of the Insurance Commissioner’s Application of Insurance Commissioner for Orders Settling and Approving Final Report and Account of the Liquidator of Paula Insurance;
The Commissioner is authorized to distribute approximately $52,975,862 to
approved Class 2 claimants. The amount available for distribution is subject to adjustment for investment income and changes in market value of investments that have been posted as of the date the investments are withdrawn from the investment pool. The distributions shall be made within two weeks of receipt of the signed order from the Court;
The Commissioner is authorized to retain the sum of $574,941 for payment of administrative expenses incurred by the Commissioner from May 1, 2008, to May 1, 2011, for administrative and closing costs and to retain the sum of $700,960 for accrued tax liability. The Commissioner is authorized to pay any excess closing and administrative costs out of the funds appropriated for the maintenance of the Department of Insurance. A report to the Court of the expenditure of these funds shall not be required;
In accordance with the six month waiting period of the Code of Civil Procedure section 1517, the Commissioner, as to disbursements which are either undeliverable or as to which issued checks have not then been negotiated, is authorized to void such checks as have not then been negotiated and escheat all undeliverable amounts and amounts of non-negotiated checks to the Insurance Fund pursuant to Insurance Code section 12937;
The Commissioner is authorized to maintain in the Conservation & Liquidation Office imaged databases, all records of Paula Insurance Company for three years from the date of the Court’s order, and thereafter the Commissioner is authorized to destroy all records of Respondent, except for those records necessary for examination by the Department of Finance or other auditor of the Commissioner’s books and records pursuant to Insurance Code section 1061;
The Commissioner is authorized to take any action necessary to accomplish the purpose of this Order; and
The estate of Paula Insurance Company is closed and the Commissioner is discharged as liquidator upon the filing of a declaration that the Commissioner has distributed the assets in accordance with this Court’s order and upon the filing of a dismissal of the action.
Upon dismissal of this action, the Insurance Commissioner, his Special Deputies, the Conservation and Liquidation Office, its employees, the California Department of Insurance, and its personnel, and the Insurance Commissioner’s agents and attorneys, is discharged from any and all claims, debts, liabilities, or duties to further account for the assets or liabilities of Paula Insurance Company through the date of the declaration that the Commissioner has distributed the assets in accordance with this Court’s order, and shall have no liability thereafter for such claims, debts, liabilities or accounting.
