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developed and used tables to reference the amount of conversion
credits which would accumulate under the C-group term policy and
be transferred to the C-group conversion UL policy upon
conversion, and the table amounts were referenced in marketing
materials provided to prospective customers; no C-group term
policyholder who converted to a C-group conversion UL policy ever
received anything less than the appropriate amount referenced in
the tables. Upon conversion, the C-group conversion UL policy is
generally fully funded, and C-group conversion UL policyholders
need not pay additional premiums on the C-group conversion UL
policy. A converting policyholder may, if he or she desires, pay
additional premiums on the C-group conversion UL policy. None of
the individual petitioners chose to do so.
Mr. Ankner designed the concept of conversion credits to
allow the C-group term policy to operate in tandem with the C-
group conversion UL policy, while preserving the appearance and
argument that the two policies were separate and distinct.
Conversion credits generally work as follows. With respect to
each premium paid on the C-group term policy, the portion that
exceeds the applicable mortality charge (cost of insurance) is
set aside in a conversion credit account bearing interest at 4.5
percent per annum for transfer to the C-group conversion UL
policy upon conversion thereto. Upon conversion, the conversion
credits which have accumulated up to that time (conversion credit
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