Receivership Orders

On July 1, 2005, Midland Insurance Group, Inc. (“Midland”) and Student Plans, Inc. (“Student Plans”) were placed under an Order of Conservation.  On July 22, 2005, Security Insurance Company, Ltd. (“Security Ltd.”) was placed under an Order of Conservation.

On July 26, 2005, an Agreed Order vacating sequestration of the Conservation Orders for the three companies was approved by the Supervising Court.

On August 9, 2005, Midland, Student Plans, and Security Ltd. were placed into rehabilitation under an Agreed Order of Rehabilitation entered by the Circuit Court of Cook County, Illinois.

Pursuant to the Agreed Order of Rehabilitation, all direct policies and/or certificates of insurance relating to the College Plan, Student Plan K-12 and Special Risk programs underwritten by Midland, Student Plans, and/or Security Ltd., which remain in-force on September 1, 2005, were cancelled effective September 1, 2005.

Pursuant to an Assumption Agreement entered into between the Rehabilitator and Markel Insurance Company ("Markel"), Markel assumed all accident and sickness claim liabilities that occurred on or after September 1, 2005 on these policies.

The Rehabilitator petitioned the Supervising Court to enter an order establishing a moratorium on the payment of claims until such time as the true nature and extent of Security Insurance Company, Ltd.'s claim liabilities can be ascertained with reasonable certainty.  Pursuant to that petition, the Court did enter an order dated February 6, 2006, establishing a moratorium on the payment of claims for a period of ninety (90) days during which such time the Rehabilitator shall undertake the review of evaluation of the outstanding claim liabilities of Security Insurance Company, Ltd.  On May 8, 2006, the Court ordered a 45-day extension of the moratorium on payment of claims.  The Rehabilitator was further ordered to thereafter report his findings to the Court and present his recommendations for the payment of claims and the winding down and termination of the rehabilitation proceedings.

On June 22, 2006, the Court ordered that the moratorium on the payment of claims remain in full force and effect until further order of the court.

On July 21, 2006, the supervisory court entered an order setting an October 13, 2006 claim filing deadline.

On April 30, 2007, the Supervisory Court entered an order: (i) approving the Rehabilitator’s recommendation that a one hundred percent (100%) dividend be declared on all of Midland Insurance Group’s timely filed claims allowed and approved by the Court for distribution; and (ii) authorizing the Rehabilitator to make a distribution of Midland Insurance Group’s estate assets to effectuate the one hundred percent (100%) dividend on allowed and approved Midland claims.

On May 15, 2007, the Cook County Supervisory Court entered an order approving a final distribution of Student Plans, Inc.’s estate assets, as follows: payment to the statutory priority level (c) claimant in full (100%) satisfaction of the allowed claim; payment to the statutory priority level (d) claimant in full (100%) satisfaction of the allowed claim; and a pro rata distribution of 49.1544% on all claims allowed at priority level (g) of the statutory asset distribution schedule. The Court’s order further provided for termination of the Student Plans, Inc. rehabilitation proceeding and closing the Student Plans, Inc. estate.

On July 25, 2007, the Supervisory Court entered an order approving the final distribution of Midland Insurance Group, Inc.’s estate assets and the termination of the Midland Insurance Group, Inc. rehabilitation proceeding.

By order dated March 17, 2008, the Supervisory Court entered an order approving a final 90.9578% pro rata distribution of Security Insurance Company, Ltd.’s assets on all timely filed claims allowed at priority level (d) of the statutory assets distribution schedule, 215 ILCS 5/205(1)(d). The Court’s order also terminated, closed and dismissed, without prejudice, the Security Insurance Company Ltd. rehabilitation proceedings.