Winn-Dixie Stores, Inc. and Subsidiaries - Page 24




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          1993, and required that AIG and petitioner agree to several                 
          provisions under the insurance policies relating to the                     
          following:  Claim Stabilization Reserve, Cost of Insurance Rates,           
          Expense Caps, Surrender Fee, Interest Rate on Unborrowed Funds,             
          and the Loan Interest Spread.                                               
               The PTO generally provided that AIG would establish on                 
          behalf of petitioner a claims stabilization reserve (CSR) for the           
          policies.  Petitioner could not withdraw or borrow against the              
          amounts credited to the CSR.  The maximum level of the CSR at the           
          end of each year was generally determined to be the higher of the           
          annualized "cost of insurance"24 (COI) charges actually collected           
          in any one of 3 preceding policy years or the highest amount of             
          death benefits actually incurred in any one of 3 policy years.              
          COI charges were deducted from the premium that was paid and used           
          to fund the CSR.  The CSR was generally held available by AIG to            
          pay death claims under the COLI policies.                                   


               24"Cost of Insurance" was defined in the policy document.              
          The COI was calculated on each monthly processing date.                     
          Generally, the COI was calculated under the following formula:              
          COI = (Proceeds - Account Value)  x  (Value from Table of                   
          1,000                              Maximum Insurance Rates)                 
               Proceeds were defined as the benefits due to petitioner as             
          the beneficiary.  Account Value on the policy date was defined as           
          the initial net premium less an annual expense charge.                      








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