Edward Clasby and C.T. Garrahan Insurance Agency, Inc. - Page 7




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               In July 1982, Murray told petitioner that the Garrahan                 
          Agency would receive commissions because FUH approved the                   
          program.  Petitioner was not surprised that the Garrahan Agency             
          was to receive the commissions.                                             
               4.   Investment in the Program by the FUH Plan                         
               On July 21, 1982, Walckner sent a memorandum to the FUH                
          finance committee, of which petitioner was a member, endorsing              
          the program.                                                                
               FUH bought whole life insurance from Travelers for about 147           
          participants in the FUH plan.  FUH was named as the beneficiary.            
          On September 15, 1982, FUH assigned the insurance policies to the           
          FUH plan.                                                                   
               The Garrahan Agency signed the applications and underwrote             
          (i.e., assumed the risk of) and issued the policies for the                 
          Travelers whole life insurance contracts purchased for the FUH              
          plan participants.  Petitioner signed the FUH plan's insurance              
          policies; i.e., he accepted the policies for FUH.                           
               In 1984, the FUH plan converted its insurance policies from            
          whole life to universal life insurance.  The Garrahan Agency                
          serviced and processed the universal life insurance contracts               
          with the FUH plan participants and received additional                      
          commissions after the FUH plan converted its insurance policies.            








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