- 56 -
[AIG/NUF] would have no control over the payment of premium by
shippers, * * * [AIG/NUF] would not take on the responsibility
for any bad debt or uncollectables under the program." These
proposals all became part of petitioner's method of operation on
January 1, 1984.
Under the Facultative Reinsurance Agreement between NUF and
OPL, article I, item B lists the Shippers Interest contract as
the policy to be reinsured. Under article XVIII, subparagraph
(A), neither NUF nor OPL could terminate the reinsurance
agreement while the Shippers Interest policy remained in force.
Article XVIII further requires that only in the event that the
Shippers Interest contract is in fact terminated will the
reinsurance agreement between NUF and OPL be terminated
simultaneously therewith. Either petitioner or the "Named
Insured" could cancel the Shipper's Interest contract under the
terms of that agreement.28
Beginning in January 1984, petitioner transferred excess
value amounts billed to its regular shippers and collected from
other shippers, net of claims paid in excess of $100, to NUF on a
monthly basis. Petitioner did not reduce the amounts transferred
to NUF in order to compensate itself for sales and marketing
28We note that it is unrealistic to conceive of a situation
in which a single shipper could cancel the whole Shipper's
Interest contract or that all the unrelated shippers in unison
could cancel the contract.
Page: Previous 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 NextLast modified: May 25, 2011