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instant case, the comfort letter applied to only one line of
business, and that line of business was not the primary insurance
coverage provided by Parthenon to HCA and the sister
subsidiaries. Parthenon insured, on a direct basis, general and
professional liabilities for which no indemnity agreement was in
effect. The comfort letter, furthermore, was not in effect after
Ideal Mutual's insolvency during 1984. The indemnity agreement
between HCA and Continental related to liabilities arising from
the agreement to cede insurance obligations that HCA had entered
into with the Superintendent of Insurance of the State of New
York as Rehabilitator of Ideal Mutual Insurance Co., but it
specifically excluded Continental's own obligations under its
policies. Accordingly, the indemnity agreement was restricted to
obligations relating to Ideal Mutual's policies, and it did not
involve Continental's own policies. Under such circumstances, we
conclude that in the instant case the successive indemnity
agreements between HCA and Ideal Mutual and between HCA and
Continental are not a sufficient basis for finding that the
transactions between Parthenon and the sister subsidiaries were
not bona fide.13
13 In accordance with Malone & Hyde, Inc. v. Commissioner, 62
F.3d 835 (6th Cir. 1995), however, risk shifting is absent for
(continued...)
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