Unicare Life v. Hansmann

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   +DQVPDQQHWDOY)LGHOLW\ 1RV (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU ,QYHVWPHQWVHWDO  )LOH 1DPH DS

9,1&(17 %26&+(5$772  81,7('67$7(6&28572)$33($/6 ,QGHSHQGHQW3HUVRQDO  5HSUHVHQWDWLYHRIWKH(VWDWH  )257+(6,;7+&,5&8,7  BBBBBBBBBBBBBBBBB RI,URQH3DYDQ'HFHDVHG  'HIHQGDQW$SSHOOHH   1RV ; ,5,'( 3$9$1  5(1(( +$160$11  'HIHQGDQW   1 3ODLQWLII$SSHOODQW  1RV   $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW Y ! IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW  1RVn  $UWKXUs7DUQRZ'LVWULFWsXGJH ),'(/,7< ,19(670(176  ,167,787,21$/ 6(59,&(6  $UJXHG2FWREHU &203$1<  'HIHQGDQW$SSHOOHH  'HFLGHGDQG)LOHG$SULO   %HIRUH%2**668+5+(,15,&+DQG&/$<&LUFXLW 9,1&(17 %26&+(5$772  sXGJHV ,QGHSHQGHQW3HUVRQDO  5HSUHVHQWDWLYHRIWKH(VWDWH  BBBBBBBBBBBBBBBBB RI,URQH3DYDQ'HFHDVHG  ,QWHUYHQRU$SSHOOHH  &2816(/   $5*8('  (GZDUG & &XWOLS sU .(55 5866(// 1RV  :(%(5 'HWURLW 0LFKLJDQ IRU $SSHOODQW  *DU\ 5 81,&$5( /,)( +($/7+  7U]DVNRV*$5<575=$6.26 $662&,$7(6:DOOHG ,1685$1&( &203$1<HWDO  /DNH 0LJKLJDQ IRU $SSHOOHHV  21 %5,()  (GZDUG & 3ODLQWLIIV  &XWOLSsU.(555866(// :(%(5'HWURLW0LFKLJDQ  IRU$SSHOODQW*DU\57U]DVNRV*$5<575=$6.26  $662&,$7(6:DOOHG/DNH0LJKLJDQIRU$SSHOOHHV Y   5(1(( +$160$11  'HIHQGDQW$SSHOODQW  

 1RV +DQVPDQQHWDOY)LGHOLW\   +DQVPDQQHWDOY)LGHOLW\ 1RV  ,QYHVWPHQWVHWDO ,QYHVWPHQWVHWDO 

BBBBBBBBBBBBBBBBB 3DYDQ HOHFWHG 2SWLRQDO /LIH ,QVXUDQFH DW IRXU WLPHV KLV VDODU\RQ)HEUXDU\7KH2SWLRQDO/LIH,QVXUDQFH 23,1,21 ZDV WKURXJK WKH %DVLF *URXS /LIH ,QVXUDQFH 3ROLF\  7KH BBBBBBBBBBBBBBBBB 2SWLRQDO /LIH ,QVXUDQFH HOHFWLRQ IRUP VWDWHG WKDW m7KH EHQHILFLDU\LHVIRU2SWLRQDO/LIH,QVXUDQFHRQP\OLIHVKDOO &/$<&LUFXLWsXGJH7KLVLVDFRQVROLGDWHGDSSHDO,Q EH WKH VDPH DV GHVLJQDWHG IRU P\ %DVLF >*URXS@ /LIH &DVH 1RV  DQG  $SSHOODQW 5HQHH ,QVXUDQFHXQOHVV,VSHFLI\RWKHUZLVHEHORZ>@ls$DW +DQVPDQQDSSHDOVIURPWKHGLVWULFWFRXUWjVRUGHUJUDQWLQJ 3DYDQGLGQRWVSHFLI\DEHQHILFLDU\XQGHUWKH2SWLRQDO/LIH VXPPDU\MXGJPHQWLQIDYRURI$SSHOOHHWKH(VWDWHRI,URQH ,QVXUDQFH 3DYDQmWKH(VWDWHlDZDUGLQJWKHSURFHHGVRI,URQH3DYDQjV HPSOR\HUVSRQVRUHGVWRFNLQYHVWPHQWSODQWRWKH(VWDWH,Q 3DYDQDQG/\QQ$QGHUOHPDUULHGRQ6HSWHPEHU &DVH1RVDQG+DQVPDQQDSSHDOVIURPWKH 6XEVHTXHQWO\ )RUG DQQRXQFHG D QHZ SROLF\ ZKHUHE\ DOO GLVWULFWFRXUWjVRUGHUJUDQWLQJVXPPDU\MXGJPHQWLQIDYRURI SUHYLRXV66,3EHQHILFLDU\GHVLJQDWLRQVZHUHUHQGHUHGLQYDOLG WKH(VWDWHDZDUGLQJWKHSURFHHGVRI,URQH3DYDQjVHPSOR\HU DVRIsDQXDU\8QGHUWKHQHZSROLF\LIDQHPSOR\HH VSRQVRUHGOLIHLQVXUDQFHSODQWRWKH(VWDWH+DQVPDQQDOVR GLG QRW GHVLJQDWH D QHZ EHQHILFLDU\ WKH SHUVRQ HQWLWOHG WR DSSHDOVIURPWKHGLVWULFWFRXUWjVRUGHUGHQ\LQJ+DQVPDQQjV UHFHLYH WKH HPSOR\HHjV OLIH LQVXUDQFH SURFHHGV ZRXOG DOVR PRWLRQIRUUHFRQVLGHUDWLRQ)RUWKHUHDVRQVVHWIRUWKEHORZ UHFHLYHWKH66,3SURFHHGVXSRQWKHHPSOR\HHjVGHDWK2Q ZH$)),50WKHGLVWULFWFRXUWjVRUGHUV 6HSWHPEHU   )RUG LVVXHG D VXSSOHPHQW WR WKH SURVSHFWXVDQGDUHPLQGHURQ'HFHPEHUWRH[SODLQ %$&.*5281' WKH QHZ SURYLVLRQ LQ WKH 66,3 GRFXPHQWV  3DYDQ GLG QRW GHVLJQDWHDQHZEHQHILFLDU\XQGHUWKH66,3 ,URQH 3DYDQ m3DYDQl EHJDQ ZRUNLQJ IRU )RUG 0RWRU &RPSDQ\m)RUGlRQsXO\2Q6HSWHPEHU 2Q1RYHPEHU3DYDQFRPSOHWHGDQGVLJQHGDIRUP 3DYDQ HOHFWHG )RUGjV %DVLF *URXS /LIH ,QVXUDQFH HOHFWLQJWRFRQWLQXHKLV2SWLRQDO/LIH,QVXUDQFHDWIRXUWLPHV DGPLQLVWHUHG E\ sRKQ +DQFRFN 0XWXDO /LIH ,QVXUDQFH KLVVDODU\DQGWRSURYLGHVSRXVDOFRYHUDJHIRUKLV &RPSDQ\msRKQ+DQFRFNlDQG81,&$5(/LIH +HDOWK WKHQVHFRQGZLIH$QGHUOH ,QVXUDQFH &RPSDQ\ m81,&$5(l  3DYDQ GHVLJQDWHG KLV PRWKHU,ULGH3DYDQDVWKHEHQHILFLDU\3DYDQDOVRHOHFWHGWR 3DYDQ REWDLQHG D GHIDXOW MXGJPHQW RI GLYRUFH DJDLQVW SDUWLFLSDWHLQWKH)RUG6DYLQJVDQG6WRFN,QYHVWPHQW3ODQIRU $QGHUOHRQ$SULO7KHGHIDXOWMXGJPHQWRIGLYRUFH 6DODULHG(PSOR\HHVm66,3l YRLGHGWKH2SWLRQDO/LIH,QVXUDQFHFRYHUDJHRI$QGHUOH 3DYDQDQG+DQVPDQQPDUULHGRQsDQXDU\2Q 3DYDQ UHWLUHG IURP )RUG RQ sXO\    2Q 0DUFK3DYDQFKDQJHG KLVEHQHILFLDU\GHVLJQDWLRQ 6HSWHPEHU   3DYDQ H[HFXWHG KLV /DVW :LOO DQG IURPKLVPRWKHUWR+DQVPDQQ3DYDQILOHGDFRPSODLQWIRU 7HVWDPHQW m:LOOl  ,Q KLV :LOO 3DYDQ QDPHG KLV WZR DQQXOPHQWRQ'HFHPEHUDOOHJLQJWKDW+DQVPDQQ QHSKHZV 9LQFHQW %RVFKHUDWWR DQG 3DXO %RVFKHUDWWR DV HQWHUHGWKHPDUULDJHWKURXJKGHFHLWIUDXGDQGFRQFHDOPHQW EHQHILFLDULHVRIKLVHVWDWH 7KH:LOOGRHVQRWPHQWLRQWKH DQGWKDWWKHPDUULDJHKDGQHYHUEHHQFRQVXPPDWHG3DYDQ SURFHHGVRIWKH66,3RURIWKHOLIHLQVXUDQFHSROLFLHV REWDLQHGDGHIDXOWMXGJPHQWRIDQQXOPHQWRQ$SULO 3DYDQDQG+DQVPDQQKDGOLWWOHRUQRFRQWDFWWKHUHDIWHU 3DYDQGLHGRQsXQH$WWKHWLPHRI3DYDQjVGHDWK WKHSURFHHGVRIWKH%DVLF*URXS/LIH,QVXUDQFHZHUHYDOXHG 1RV +DQVPDQQHWDOY)LGHOLW\   +DQVPDQQHWDOY)LGHOLW\ 1RV  ,QYHVWPHQWVHWDO ,QYHVWPHQWVHWDO 

DW  ZKLOH WKH SURFHHGV RI WKH 2SWLRQDO /LIH UHQGHULQJYRLGWKHVSRXVDOEHQHILFLDU\GHVLJQDWLRQXQGHUWKH ,QVXUDQFH ZHUH YDOXHG DW   81,&$5(jV UHFRUGV %DVLF*URXS/LIH,QVXUDQFH3ROLF\GXHWRWKHDQQXOPHQWRI VKRZHG m5HQHH 3DYDQl m+DQVPDQQl DV WKH GHVLJQDWHG WKHPDUULDJHEHWZHHQ3DYDQDQG+DQVPDQQ2Q0DUFK EHQHILFLDU\RIWKH%DVLF*URXS/LIH,QVXUDQFH WKHGLVWULFWFRXUWHQWHUHGDQRUGHUJUDQWLQJWKH(VWDWHjV PRWLRQ IRU VXPPDU\ MXGJPHQW DQG GHQ\LQJ +DQVPDQQjV /HWWHUV RI DXWKRULW\ ZHUH LVVXHG WR 9LQFHQW %RVFKHUDWWR PRWLRQIRUVXPPDU\MXGJPHQW m%RVFKHUDWWRl RQ sXO\   DSSRLQWLQJ KLP DV WKH LQGHSHQGHQW SHUVRQDO UHSUHVHQWDWLYH IRU WKH (VWDWH +DQVPDQQ ILOHG D PRWLRQ IRU UHFRQVLGHUDWLRQ RQ %RVFKHUDWWR LQIRUPHG 81,&$5( RI KLV DSSRLQWPHQW RQ )HEUXDU\DOOHJLQJWKDWDQQXOPHQWVGRQRWIDOOXQGHU 6HSWHPEHU    7KHUHDIWHU RQ 2FWREHU   †  DQG WKHUHIRUH +DQVPDQQ DV WKH QDPHG 81,&$5( LQIRUPHG %RVFKHUDWWR WKDW +DQVPDQQ KDG DQ EHQHILFLDU\ XQGHU WKH %DVLF *URXS /LIH ,QVXUDQFH 3ROLF\ LQWHUHVWDVDEHQHILFLDU\LQ3DYDQjVOLIHLQVXUDQFHSURFHHGV VKRXOGUHFHLYHWKH%DVLF*URXS/LIH,QVXUDQFHWKH2SWLRQDO %RVFKHUDWWRRQEHKDOIRIWKH(VWDWHSURWHVWHGWKHSD\PHQWRI /LIH ,QVXUDQFH DQG WKH 66,3 SURFHHGV  7KH GLVWULFW FRXUW DQ\ OLIH LQVXUDQFH SURFHHGV WR +DQVPDQQ  &RQVHTXHQWO\ GHQLHG+DQVPDQQjVPRWLRQIRUUHFRQVLGHUDWLRQRQ0D\ sRKQ +DQFRFN DQG 81,&$5( ILOHG D FRPSODLQW IRU  LQWHUSOHDGHU&DVH1RVDQGRQ)HEUXDU\ $VWLSXODWHGRUGHUZDVHQWHUHGRQsXQH +DQVPDQQWLPHO\ILOHGDQRWLFHRIDSSHDORQsXQH GLVPLVVLQJsRKQ+DQFRFNDQG81,&$5(IURPWKHFDVHsRKQ +DQVPDQQ QRZ DSSHDOV WKH GLVWULFW FRXUWjV GHQLDO RI KHU +DQFRFN DQG 81,&$5( GHSRVLWHG WKH %DVLF *URXS /LIH PRWLRQ IRU VXPPDU\ MXGJPHQW DQG PRWLRQ IRU ,QVXUDQFHSURFHHGVDQGWKH2SWLRQDO/LIH,QVXUDQFHSURFHHGV UHFRQVLGHUDWLRQ WRWDOLQJZLWKWKHGLVWULFWFRXUW ',6&866,21 +DQVPDQQILOHGDFRPSODLQW&DVH1RVDQG  DJDLQVW )RUG DQG )LGHOLW\ ,QYHVWPHQW ,QVWLWXWLRQDO , $33/,&$7,212)(5,6$35((037,21 6HUYLFHV&RPSDQ\m)LGHOLW\lIRUWKHSURFHHGVRIWKH66,3 RQsXQH)RUGZDVYROXQWDULO\GLVPLVVHGIURPWKH :HUHYLHZWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\MXGJPHQW FDVHRQsXO\7KH(VWDWHUHTXHVWHGDQGZDVJUDQWHG GHQRYR0HWUR/LIH,QV&RY0DUVK)G OHDYHWRLQWHUYHQHDWDKHDULQJKHOGRQ)HEUXDU\ WK&LU0HWUR/LIH,QV&RY3UHVVOH\)G WK&LU6XPPDU\MXGJPHQWLVDSSURSULDWHZKHQ $W WKH KHDULQJ WKH GLVWULFW FRXUW RQ FURVVPRWLRQV IRU WKHUHLVQRGLVSXWHDVWRDQ\PDWHULDOTXHVWLRQRIIDFWDQGRQH VXPPDU\MXGJPHQWE\+DQVPDQQDQGWKH(VWDWHKHOGWKDWWKH SDUW\LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZ)HG5&LY (VWDWHZDVWKHSURSHUEHQHILFLDU\RIDOOWKHSURFHHGVRIWKH 3 %DVLF*URXS/LIH,QVXUDQFHWKH2SWLRQDO/LIH,QVXUDQFHDQG WKH66,37KHGLVWULFWFRXUWUHDVRQHGWKDW0LFKLJDQODZQRW $WLVVXHLQWKLVFDVHLVZKHWKHUWKHGLVWULFWFRXUWZDVFRUUHFW WKH(PSOR\PHQW5HWLUHPHQW,QFRPH6HFXULW\$FWm(5,6$l LQILQGLQJWKDW+DQVPDQQjVFODLPVDUHJRYHUQHGE\0LFKLJDQ DSSOLHGEHFDXVHWKHWUDQVDFWLRQWKDWJDYHULVHWRWKHFODLPKDG ODZ7ZRSURYLVLRQVRI(5,6$GHWHUPLQHZKHWKHU(5,6$ RFFXUUHG EHIRUH WKH HIIHFWLYH GDWH RI (5,6$  7KH GLVWULFW DSSOLHVWRSUHHPSW0LFKLJDQODZ7KHSURYLVLRQVSURYLGHLQ FRXUWIXUWKHUUHDVRQHGWKDW0LFKLJDQjVSXEOLFSROLF\UHTXLUHG UHOHYDQWSDUW WKHDSSOLFDWLRQRI0LFK&RPS/DZV$QQ†WKHUHE\ 1RV +DQVPDQQHWDOY)LGHOLW\   +DQVPDQQHWDOY)LGHOLW\ 1RV  ,QYHVWPHQWVHWDO ,QYHVWPHQWVHWDO 

D 6XSHUVHGXUHHIIHFWLYHGDWH([FHSWDVSURYLGHGLQ +DQVPDQQDUJXHVWKDW(5,6$DSSOLHVVLQFHWKHIROORZLQJ VXEVHFWLRQERIWKLVVHFWLRQWKHSURYLVLRQVRIWKLV DOOHJHGO\UHOHYDQWDFWVRURPLVVLRQVLQWKLVFDVHRFFXUUHGDIWHU VXEFKDSWHUDQGVXEFKDSWHU,,,RIWKLVFKDSWHUVKDOO sDQXDU\WKHHIIHFWLYHGDWHRI(5,6$81,&$5( VXSHUVHGHDQ\DQGDOO6WDWHODZVLQVRIDUDVWKH\PD\ DGPLQLVWHUHGDQGXSGDWHGLWVSODQGRFXPHQWVIURPWKHGDWH QRZRUKHUHDIWHUUHODWHWRDQ\HPSOR\HHEHQHILWSODQ WKDW 3DYDQ VLJQHG KLV ODVW EHQHILFLDU\ GHVLJQDWLRQ XQWLO KLV GHVFULEHG LQ VHFWLRQ D RI WKLV WLWOH DQG QRW GHDWKRQsXQH)LGHOLW\DGPLQLVWHUHGDQGKHOGDOO H[HPSW XQGHU VHFWLRQ E RI WKLV WLWOH  7KLV WKHDVVHWVRIWKH66,3IURPWKHGDWHWKDW3DYDQVLJQHGKLVODVW VHFWLRQVKDOOWDNHHIIHFWRQsDQXDU\ EHQHILFLDU\ GHVLJQDWLRQ XQWLO KLV GHDWK RQ sXQH    )RUG ILOHG 3DYDQjV 2SWLRQDO /LIH ,QVXUDQFH DSSOLFDWLRQ E &RQVWUXFWLRQDQGDSSOLFDWLRQ7KLVVHFWLRQVKDOO ZLWK81,&$5(RQ)HEUXDU\DQGRQ1RYHPEHU QRWDSSO\ZLWKUHVSHFWWRDQ\FDXVHRIDFWLRQZKLFK )RUGFKDQJHGLWVEHQHILFLDU\GHVLJQDWLRQGRFXPHQWV DURVHRUDQ\DFWRURPLVVLRQWKDWRFFXUUHGEHIRUH DV WR WKH 66,3 DV RI sDQXDU\    81,&$5( sDQXDU\ LQWHUSUHWHGWKHSODQGRFXPHQWVDVRIWKHGDWHRI3DYDQjVGHDWK RQ sXQH   DQG  81,&$5( DQG )LGHOLW\ ZDV 86&†DE LQIRUPHG E\ WKH (VWDWH WKDW LW SURWHVWHG +DQVPDQQjV EHQHILFLDU\GHVLJQDWLRQDIWHUsXQH+DQVPDQQIXUWKHU ,Q 6WHYHQV Y (PSOR\HU7HDPVWHUV sRLQW &RXQFLO 1R  DUJXHVWKDW†E RQO\DSSOLHVWRWKHDFWVRURPLVVLRQV 3HQVLRQ)XQG)GWK&LUZHLQWHUSUHWHG RIDQHPSOR\HURUSODQILGXFLDU\DQGWKDWWKHXQLIRUPUXOHLV WKHDSSOLFDWLRQRI(5,6$†E DVIROORZV WKDW (5,6$ SUHHPSWV 0LFKLJDQ ODZ ZKHQ DQ (5,6$ SODQ ILGXFLDU\ LQWHUSUHWV D SRVW(5,6$ SODQ  :H GLVDJUHH ZLWK 7KH DSSOLFDWLRQ RI (5,6$ WKXV GHSHQGV XSRQ  D +DQVPDQQjVDUJXPHQWV GHWHUPLQDWLRQRIWKHWLPHWKHFDXVHRIDFWLRQDURVHDQG  D GHWHUPLQDWLRQ RI WKH WLPH RI DFWV RU RPLVVLRQV $VWR+DQVPDQQjVILUVWVHFRQGILIWKDQGVL[WKFODLPRI 5RGULJXH]Y0(%$3HQVLRQ7UXVW)GWK UHOHYDQW DFWV ZH ILQG WKH IDFW WKDW WKH %DVLF *URXS /LIH &LU FHUW GHQLHG  86   6&W   ,QVXUDQFH DQG WKH 66,3 GRFXPHQWV ZHUH DGPLQLVWHUHG /(GG   FLWLQJ FDVHV  7KHUHIRUH XQGHU LQWHUSUHWHGDQGGLVSXWHGDIWHUWKHHIIHFWLYHGDWHRI(5,6$ VHFWLRQE LIHLWKHUmWKHFDXVHRIDFWLRQDURVHl LUUHOHYDQWVLQFHZHIRXQGLQ6WHYHQVWKDWWKHVHDFWVGLGQRW RUUHOHYDQWmDFWVRIRPLVVLRQVlRQZKLFKDSHQVLRQIXQG GHWHUPLQHZKHWKHU(5,6$DSSOLHV)GDW EDVHG D SRVW EHQHILWV GHFLVLRQ RFFXUUHG EHIRUH sDQXDU\WKHQ(5,6$GRHVQRWDSSO\ $VWR+DQVPDQQjVWKLUGFODLPRIUHOHYDQWDFWVZHILQGWKH IDFW WKDW )RUG ILOHG 3DYDQjV 2SWLRQDO /LIH ,QVXUDQFH )GDW DSSOLFDWLRQ ZLWK 81,&$5( RQ )HEUXDU\   DQG RQ 1RYHPEHULUUHOHYDQW3DYDQjVHOHFWLRQRI2SWLRQDO 7KHILUVWSURQJRIWKH†E WHVWXQGHU6WHYHQVLVQRW /LIH ,QVXUDQFH RQ )HEUXDU\   QHLWKHU DFWHG DV D DW LVVXH+DQVPDQQDQGWKH(VWDWHDJUHHWKDWWKHFDXVHRI UHDIILUPDWLRQ RI WKH +DQVPDQQ VSRXVDO EHQHILFLDU\ DFWLRQGLGQRWDULVH XQWLO DIWHUsDQXDU\EHFDXVHQR GHVLJQDWLRQGDWHG0DUFKQRUDVDQDFWWRQHJDWHWKH EHQHILWVZHUHGXHXQWLODIWHU3DYDQjVGHDWKRQsXQH DSSOLFDWLRQ RI (5,6$ † E   7KH 2SWLRQDO /LIH +RZHYHU+DQVPDQQDQGWKH(VWDWHGLVDJUHHZLWKUHVSHFWWR ,QVXUDQFHHOHFWLRQIRUPUHIOHFWVWKHIDFWWKDW3DYDQLQFUHDVHG WKHVHFRQGSURQJRIWKH†E WHVWXQGHU6WHYHQV KLV OLIH LQVXUDQFH FRYHUDJH WR IRXU WLPHV KLV VDODU\  ,Q 1RV +DQVPDQQHWDOY)LGHOLW\   +DQVPDQQHWDOY)LGHOLW\ 1RV  ,QYHVWPHQWVHWDO ,QYHVWPHQWVHWDO 

DGGLWLRQ 3DYDQjV HOHFWLRQ WR FRQWLQXH KLV 2SWLRQDO /LIH $SULO+DQVPDQQZDVQRORQJHUKLVZLIHDVDPDWWHU ,QVXUDQFHDQGWRSURYLGHVSRXVDOFRYHUDJHIRUKLV RI ODZ6HH%/$&.j6 /$: ',&7,21$5<WKHG WKHQVHFRQGZLIH$QGHUOHRQ1RYHPEHULVLUUHOHYDQW VWDWLQJ WKDW DQ DQQXOPHQW HVWDEOLVKHV WKDW WKH PDULWDO WR+DQVPDQQjVFODLPWRWKHSURFHHGVRIWKH%DVLF*URXS/LIH UHODWLRQVKLS QHYHU H[LVWHG LQ ODZ  7KXV +DQVPDQQjV ,QVXUDQFHRUWKH66,37KH2SWLRQDO/LIH,QVXUDQFHFRYHUDJH LQWHUHVWVLQWKH%DVLF*URXS/LIH,QVXUDQFHWHUPLQDWHGDVRI RI$QGHUOHWHUPLQDWHGXSRQWKHGHIDXOWMXGJPHQWRIGLYRUFH $SULOVLQFHVKHOHJDOO\ZDVQRORQJHU3DYDQjVZLIH RQ$SULO DVLQGLFDWHGRQWKHHOHFWLRQIRUP $VWR+DQVPDQQjVIRXUWKFODLPRIUHOHYDQWDFWVZHILQG %HFDXVHWKHUHOHYDQWDFWVRURPLVVLRQVRFFXUUHGEHIRUHWKH LUUHOHYDQW WKH IDFW WKDW )RUG FKDQJHG LWV EHQHILFLDU\ HIIHFWLYHGDWHRI(5,6$sDQXDU\+DQVPDQQPXVW GHVLJQDWLRQ GRFXPHQWV WR WKH 66,3 DV RI sDQXDU\   VHHNUHOLHIXQGHU0LFKLJDQ/DZ6WHYHQV)GDW 7KH)RUG66,3QRWLFHLQSURYLGHGWKDWWKHEHQHILFLDU\RI WKH %DVLF *URXS /LIH ,QVXUDQFH ZRXOG UHFHLYH WKH 66,3 ,, $33/,&$7,21 2) 0,&+ &203 /$:6 $11 SURFHHGVXSRQ3DYDQjVGHDWKXQOHVVDQHZEHQHILFLDU\ZDV † SURYLGHG RQ RU DIWHU 1RYHPEHU    6LQFH 3DYDQ REWDLQHGDGHIDXOWMXGJPHQWRIDQQXOPHQWDJDLQVW+DQVPDQQ 0LFK&RPS/DZV$QQ†SURYLGHVLQUHOHYDQW RQ$SULODQG0LFK&RPS/DZV$QQ†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j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sDQXDU\   3DYDQ FKDQJHG KLV WKHSROLF\DQGWKHGLYRUFH EHQHILFLDU\GHVLJQDWLRQXQGHUWKH%DVLF*URXS/LIH,QVXUDQFH 3ROLF\ WR +DQVPDQQ DV KLV mZLIHl RQ 0DUFK   DQG +DQVPDQQDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQDSSO\LQJ 3DYDQ REWDLQHG D GHIDXOW MXGJPHQW RI DQQXOPHQW DJDLQVW 0LFK&RPS/DZV$QQ†WRDQDQQXOPHQWVLQFHWKH +DQVPDQQRQ$SULO SODLQODQJXDJHRIWKHVWDWXWHGRHVQRWLQFOXGHDQQXOPHQWV,Q VXSSRUWRIKHUDUJXPHQW+DQVPDQQFLWHV+XGVRQY+XGVRQ 7KHVHSUH(5,6$DFWVRURPLVVLRQVRI3DYDQDUHWKHPRVW  1:G  0LFK   ,Q +XGVRQ )UDQFLV DQG UHOHYDQWLQGHWHUPLQLQJZKHWKHU(5,6$DSSOLHVLQDVPXFKDV 7KHWLV +XGVRQ PDUULHG RQ 6HSWHPEHU    )UDQFLV RQFH 3DYDQ REWDLQHG D GHIDXOW MXGJPHQW RI DQQXOPHQW RQ REWDLQHGDGHIDXOWMXGJPHQWRIDQQXOPHQWDJDLQVW7KHWLVRQ JURXQGVRIIUDXGRQ0D\)RXUPRQWKVODWHURQ 1RV +DQVPDQQHWDOY)LGHOLW\   +DQVPDQQHWDOY)LGHOLW\ 1RV  ,QYHVWPHQWVHWDO ,QYHVWPHQWVHWDO 

6HSWHPEHU   )UDQFLV GLHG OHDYLQJ 7KHWLV DV WKH m'LYRUFHl6HH0LFK&RPS/DZV$QQ†VWDWLQJLQ QDPHG EHQHILFLDU\ RI KLV OLIH LQVXUDQFH SURFHHGV  %\ UHOHYDQWSDUWm>V@XLWVWRDQQXORUDIILUPPDUULDJHRUIRUD PLVUHSUHVHQWLQJKHUVHOIDV)UDQFLVjVXUYLYLQJVSRXVH7KHWLV GLYRUFHVKDOOEHFRQGXFWHGLQWKHVDPHPDQQHUDVRWKHUVXLWV FROOHFWHGDOORI)UDQFLVjDVVHWVLQFOXGLQJWKHOLIHLQVXUDQFH LQFRXUWVRIHTXLW\l SURFHHGV)UDQFLVjHVWDWHILOHGVXLWDJDLQVW7KHWLVVHHNLQJWR UHFRYHUDOORI)UDQFLVjDVVHWV7KH0LFKLJDQ6XSUHPH&RXUW )XUWKHUVXSSRUWWKDWDQQXOPHQWVDUHWREHLQFOXGHGZLWKLQ KHOGWKDW7KHWLVIUDXGXOHQWO\REWDLQHGVRPHRI)UDQFLVjDVVHWV †FDQEHIRXQGLQ0L[RQY0L[RQ1:G LQDVPXFKDVVKHNQRZLQJO\PLVUHSUHVHQWHGKHUVHOIDV)UDQFLVj 0LFK &W $SS   ,Q 0L[RQ WKH 0LFKLJDQ &RXUW RI VXUYLYLQJ VSRXVH  ,G DW   7KH FRXUW IXUWKHU KHOG WKDW $SSHDOVKHOGWKDWWKHWULDOFRXUWj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jVFRPSODLQWIRU :HDUHQRWSHUVXDGHGE\+DQVPDQQjVUHOLDQFHRQ+XGVRQ DQQXOPHQWZDVILOHGRQ1RYHPEHUDWDWLPHZKHQ VLQFHWKH0LFKLJDQ6XSUHPH&RXUWGLGQRWDGGUHVVWKHLVVXH 0LFK&RPS/DZV$QQ†GLGQRWVSHFLILFDOO\LQFOXGH RIZKHWKHUDQQXOPHQWVDUHHQFRPSDVVHGZLWKLQ0LFK&RPS WKH GLVSRVLWLRQ RI PDULWDO SURSHUW\ DIWHU WKH JUDQWLQJ RI DQ /DZV$QQ†LQWKDWFDVH+DQVPDQQDUJXHVWKDWWKH DQQXOPHQWWKHWULDOFRXUWPD\PDNHDmMXVWDQGUHDVRQDEOH 0LFKLJDQ6XSUHPH&RXUWjVVLOHQFHRQWKLVLVVXHLQ+XGVRQ GLVSRVLWLRQlRIWKHPDULWDOSURSHUW\VLQFHWKHmODZUHJDUGLQJ VKRXOGEHLQWHUSUHWHGDVDQLPSOLFLWUHMHFWLRQRIWKHHVWDWHjV SURSHUW\ VHWWOHPHQWV XSRQ DQQXOPHQW LV VLPLODU WR WKDW RI DUJXPHQWWKDW†YRLGHGWKHEHQHILFLDU\GHVLJQDWLRQDV GLYRUFHl  ,G DW   7KXV 0L[RQ LOOXVWUDWHV 0LFKLJDQjV RI WKH GDWH RI WKH DQQXOPHQW  +DQVPDQQjV DUJXPHQW LV LQWHQWWRWUHDWDQQXOPHQWVOLNHGLYRUFHV ZLWKRXWPHULWZKHUHDVGLVFXVVHGDERYHQRWKLQJLQ+XGVRQ VXJJHVWV WKDW WKH 0LFKLJDQ 6XSUHPH &RXUW FRQVLGHUHG )LQDOO\WKHSODLQODQJXDJHRI†LQGLFDWHVWKDWLWV †LQUHDFKLQJLWVKROGLQJV SXUSRVHLVWRWHUPLQDWHDVXUYLYLQJH[VSRXVHjVULJKWVLQWKH GHFHDVHGVSRXVHjVOLIHLQVXUDQFHSURFHHGV%HFDXVHWKHUHLV 5HYLHZRI0LFKLJDQODZLQGLFDWHVWKDWDQQXOPHQWVZHUH QR ORJLFDO GLIIHUHQFH EHWZHHQ D PDUULDJH WHUPLQDWHG E\ LQWHQGHGWREHLQFOXGHGZLWKLQ†)RUH[DPSOHWKH DQQXOPHQWRUGLYRUFHIRURXUSXUSRVHVKHUH†VKRXOG 0LFKLJDQ&RXUW5XOHVSURPXOJDWHGE\WKH0LFKLJDQ6XSUHPH DSSO\WREDU+DQVPDQQjVFODLPV:HWKHUHIRUHFRQFOXGHWKDW &RXUW KDYH PDQGDWHG VLQFH  WKDW DOO MXGJPHQWV RI WKHGLVWULFWFRXUWGLGQRWHUULQILQGLQJWKDW†YRLGV DQQXOPHQWLQFOXGHWKHLQVXUDQFHSURYLVLRQVRI†6HH WKH VSRXVDO EHQHILFLDU\ GHVLJQDWLRQ XQGHU WKH %DVLF *URXS 0,&+ &7 5)XUWKHUPRUHLQ$SULORIDVQRZ /LIH,QVXUDQFH3ROLF\GXHWRWKHDQQXOPHQWRIWKHPDUULDJH WKHDQQXOPHQWVWDWXWRU\SURYLVLRQVZHUHSDUWRI&KDSWHU EHWZHHQ3DYDQDQG+DQVPDQQ RI WKH 0LFKLJDQ &RPSLOHG /DZV $QQRWDWHG HQWLWOHG 1RV +DQVPDQQHWDOY)LGHOLW\   ,QYHVWPHQWVHWDO

,,, +$160$11j6 027,21 )25 5(&216,'(5$7,21 2UGLQDULO\ZHUHYLHZDGHQLDORIDPRWLRQWRDOWHURUDPHQG D MXGJPHQW SXUVXDQW WR )HGHUDO 5XOH RI &LYLO 3URFHGXUH HIRUDEXVHRIGLVFUHWLRQ&ROXPELD*DV7UDQVPLVVLRQ &RUSY/LPLWHG&RUS)GWK&LU FLWLQJ+XIIY0HWUR/LIH,QV&R)GWK &LU    m:KHQ KRZHYHU D 5XOH H PRWLRQ VHHNV UHFRQVLGHUDWLRQRIDJUDQWRIVXPPDU\MXGJPHQWZHFRQGXFW GHQRYRUHYLHZl&ROXPELD *DV7UDQVPLVVLRQ&RUS )GDWFLWLQJ+XII)GDWQ  7KHGLVWULFWFRXUWPXVWJUDQWDPRWLRQIRUUHFRQVLGHUDWLRQ LI WKH PRYDQW GHPRQVWUDWHV WKDW WKH GLVWULFW FRXUW DQG WKH SDUWLHVKDYHEHHQPLVOHGE\DSDOSDEOHGHIHFWDQGFRUUHFWLQJ WKH GHIHFW ZLOO UHVXOW LQ D GLIIHUHQW GLVSRVLWLRQ RI WKH FDVH 9DODVVLV&RPPXQLFDWLRQV,QFY$HWQD&DV 6XU&R )G   WK &LU  TXRWLQJ (' 0LFK /5 K +DQVPDQQDUJXHVWKDWWKHGLVWULFWFRXUWDEXVHGLWV GLVFUHWLRQLQGHQ\LQJKHUPRWLRQIRUUHFRQVLGHUDWLRQLQOLJKW RI+XGVRQ 6LQFHWKHGLVWULFWFRXUWFRUUHFWO\GHWHUPLQHGWKDW+XGVRQ RIIHUHGQRJXLGDQFHWRWKLVFDVHDVGLVFXVVHGDERYHZHILQG WKDWWKHUHZDVQRSDOSDEOHGHIHFW7KXVWKHGLVWULFWFRXUWGLG QRWHUULQGHQ\LQJ+DQVPDQQjVPRWLRQIRUUHFRQVLGHUDWLRQ &21&/86,21 )RUWKHIRUJRLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUWjV RUGHUV