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STATE OF MAINE
Alessandro A. Iuppa, Superintendent of the Maine Bureau of Insurance and the Presiding Officer in this matter, issues this Decision and Order on the application of Banc One Private Mortgage Insurance Company, Inc. for approval of an agreement and plan of merger with Cross Country Insurance Company.
In early May 2005, Banc One Private Mortgage Insurance Company, Inc., a Maine domiciled insurer (“Banc One - Maine”) submitted an application for approval with the Superintendent of an Agreement and Plan of Merger with Cross Country Insurance Company, a Vermont domiciled captive insurer (“Cross Country”) (the “Proposed Transaction”).
On July 1, 2004, Bank One Corporation, a registered multi-bank financial holding company headquartered in Illinois, merged with and into JPMorgan Chase & Co, a registered multi-bank financial holding company headquartered in New York. Following the merger, JPMorgan Chase has undertaken a company-wide review of its legal entities with a view towards streamlining its corporate structure.
As a result of the Banc One merger, JPMorgan Chase has two subsidiaries engaged in the business of reinsuring private mortgage insurance issued in connection with residential mortgage loans originated, purchased, or serviced by other JPMorgan Chase companies: Banc One - Maine and Cross Country. JPMorgan Chase proposes to merge Banc One - Maine with and into Cross Country.
JPMorgan Chase’s bank subsidiaries include JPMorgan Chase Bank, National Association, a national banking association with its main office in Ohio, that is JPMorgan Chase’s principal bank subsidiary (“Morgan Chase”); and Chase Bank, USA, National Association, a national banking association with its main office in Delaware, that houses substantially all of JPMorgan Chase’s credit card operations (“Chase”). At present, Bank One - Maine is a subsidiary of Morgan Chase and Cross Country is a subsidiary of Chase. Neither Banc One - Maine nor Cross Country issue insurance policies to the general public. Their business is strictly limited to reinsuring policies written by other carriers.
If the Proposed Transaction is approved, the ownership of Banc One - Maine will be merged with and into Cross Country on or about June 17, 2005. Thereafter, Banc One - Maine requests that its certificate of authority to transact insurance business in this State be terminated.
II. PROCEDURAL HISTORY
On or about May 2, 2005, Banc One - Maine submitted an application for
approval, which was supplemented with additional materials on June 3,
On May 31, 2005, Banc One - Maine submitted its proposed Plan of Withdrawal for purposes of terminating its existing certificate of authority in the State of Maine effective the consummation of the Proposed Transaction.
The hearing was held on June 6, 2005. Banc One - Maine representatives appeared and participated in the proceeding. No other persons, personally or through counsel or other representative, appeared at or participated in the hearing.
At the public hearing, the Superintendent orally granted confidentiality to the document entitled “Merger Agreement, Plan of Merger and Consent of Shareholders” that was included as part of the application for approval for the period up until the closing of the Proposed Transaction, if and when consummated. Following the closing of the Proposed Transaction the Merger Agreement document will be a public record in Maine, no longer subject to confidentiality.
III. STANDARD OF REVIEW
In deciding whether to approve the Proposed Transaction, the provisions of 24-A M.R.S.A. § 3474(2) require the Superintendent to determine:
The Proposed Transaction is further subject to the provisions of 24-A M.R.S.A. § 415-A which require the Superintendent to approve a plan of withdrawal for the termination of Banc One – Maine’s certificate of authority to transact insurance business in this State.
IV. FINDINGS OF FACT and CONCLUSIONS OF LAW
At the hearing held on June 6, 2005, testimonial evidence was presented by Banc One – Maine’s witness Arthur T. Guja, Esq., Senior Vice President & Associate General Counsel, J.P. Morgan Chase & Co. The documentary materials filed with the Superintendent by Banc One – Maine in support of its application for approval are also a part of the administrative record.
Based on a review of the testimonial and documentary evidence in the record, the Superintendent finds that no issues of material concern exist with respect to Banc One - Maine’s and/or Cross Country’s abilities to satisfy the legal standards for approval set forth in 24-A M.R.S.A. § 3474(2), summarized as follows:
For all of the foregoing reasons, the Superintendent concludes that the Applicants’ have met the legal standards for approval set forth in 24-A M.R.S.A. § 3474(2).
By reason of the foregoing, the Superintendent ORDERS that:
VI. NOTICE OF APPEAL RIGHTS
This Decision and Order is final agency action of the Superintendent of Insurance within the meaning of the Maine Administrative Procedure Act. Any party may appeal this Decision and Order to the Superior Court as provided by 24-A M.R.S.A. § 236, 5 M.R.S.A. § 11001, et seq. and M.R. Civ. P. 80C. Any such party must initiate an appeal within thirty days after receiving this notice. Any aggrieved non-party whose interests are substantially and directly affected by this Decision and Order may initiate an appeal within forty days of the issuance of this decision. There is no automatic stay pending appeal; application for stay may be made as provided in 5 M.R.S.A. § 11004.
PER ORDER OF THE SUPERINTENDENT OF INSURANCE
Last Updated: January 16, 2014
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