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Life or any employee, broker, or agent of AIG Life
in that regard.
3. The premiums specified in the Policies are
intended to meet the requirements of Section 7702
and Section 7702A of the Internal Revenue Code as
in effect on the date of this letter so that the
Policies will qualify as life insurance and will
not be treated as modified endowment contracts.
AIG Life does not warrant or represent that the
Policies will not be treated as modified endowment
contracts.
4. The statements contained in the attached Exhibits
A and B shall be considered as binding
representations by the * * * [petitioner] and that
such Exhibits shall be deemed attached to and made
a part of the Policies.
The Letter of Understanding provided that if, within 90 days of
June 4, 1993, all the above conditions had been met and AIG
received the total first-year premium, then AIG would agree to
issue to petitioner, in the State of Florida, the life insurance
policies effective as of March 1, 1993.
By invoice dated June 9, 1993, Coventry requested payment of
a balance due on the 1993 COLI policies of $7,245,000 from
petitioner. The invoice reflected a total premium of
$108,573,000, covering 36,191 total lives at $3,000 of premium
each, less a policy loan of $101,328,000 to arrive at the net
amount due.
On June 15, 1993, in accordance with the Letter of
Understanding, AIG sent the "Policy Terms Overview" (PTO) to
petitioner. The PTO provided for an effective date of March 1,
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