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agreement, petitioner was to pay $300,00031 in each of the first
2 years and $200,000 annually in all subsequent policy years, and
Coventry was to perform the following services in connection with
the COLI policies:
(a) On the basis of census information supplied by
petitioner
(1) Identify which of the petitioner's employees
may become insured;
(2) Calculate the face amounts of the policies
and the first year premiums for the covered
employees;
(3) Determine and process new insureds and process
any change in the status of any insured;
(4) Make the necessary calculations with respect
to premiums, loans, withdrawals, loan interest,
death claims and/or any other periodic payments;
(b) Provide consolidated invoice and itemization to
petitioner and AIG;
(c) Receive and inspect the insurance policies from AIG
and forward them to petitioner;
(d) Search government databases and other sources for
covered deceased employees and obtain death
certificates for deceased insureds;
(e) Provide petitioner with ongoing advice with respect
to financial options and strategies related to 1993
COLI polices; and
(f) Provide petitioner with various reports including
insurance value reports, year-end summaries,
accounting reports and custom-designed decision-
support reports.
31Petitioner deducted $100,000 of the $300,000 on its income
tax return for the fiscal period ending June 30, 1993.
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