Berger Chevrolet, Inc. - Page 5

                                                - 5 -                                                   
            The group policy explains the insurance coverage in detail.  When                           
            insurance is issued to a buyer he receives a certificate of                                 
            enrollment.  The certificate contains an outline of the benefits                            
            included in the group policy.                                                               
                  To provide credit insurance to its customers, Classic                                 
            contracted with Western Diversified Life Insurance Company                                  
            (Western).  Western issued certain group credit insurance                                   
            policies to Classic.  Berger contracted with American Way Life                              
            Insurance Company (American Way).  American Way issued certain                              
            group credit insurance policies to Berger.                                                  
                  Installment buyers may finance the cost of credit insurance                           
            as part of the installment sales contract.  If financed, the                                
            premiums for credit insurance are included as a specific item in                            
            the contract.  Berger and Classic each collected the full                                   
            insurance premium as part of the remittance from the financial                              
            institution after assignment of the installment sale agreement to                           
            that financial institution.  In 1990, Berger and Classic made a                             
            single remittance each month of all premiums they collected to                              
            Western and American Way, respectively.  The dealers did not                                
            retain any portion of the premiums and were not reimbursed by                               
            either Western or American Way for any of their direct or                                   
            indirect costs in connection with offering and marketing group                              
            credit insurance.                                                                           
                  Western paid a commission on each premium collected by                                
            Classic to the Woodcliff Agency, Inc. (Woodcliff), a duly                                   

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011