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On June 17, 1993, petitioner paid WJ/Coventry $300,000
pursuant to an invoice dated June 11, 1993. The payment was for
services to be performed in year 1 of an administration agreement
for the 1993 COLI policies. Also on June 17, 1993, Mr. McCook
signed a Notification Certificate as a condition precedent to the
sale of the COLI policies in which petitioner certified that it
would notify the employees of the purchase of the COLI policies
and give them an opportunity to refuse the coverage.
On July 19, 1993, Mr. McCook executed the PTO.27 Also on
July 19, 1993, Mr. McCook accepted receipt of the COLI policy
contract documents from AIG and authorized Coventry to retain
possession of the policies on petitioner's behalf.28 The type
of coverage provided was listed as "excess interest life". The
person whose life was insured under each policy was one of
petitioner's employees. Petitioner was listed as the owner and
beneficiary of each policy.
The rights and liabilities of AIG and petitioner were
governed by insurance policy forms (Policy Form), riders to the
policies, the Letter of Understanding, and the PTO. The Letter
of Understanding and the PTO set forth essential elements of the
27Mr. Walters of AIG signed the PTO on July 15, 1993.
28The contracts were listed on the delivery receipt as being
policy Nos. 5003000001 through 5003035983.
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