Neonatology Associates, P.A., et al - Page 27




                                               - 27 -                                                  
            - $819.27) x 4.5% = $819.27)).  Of the conversion credit balance,                          
            $9,037.03 could have been transferred at this time to the C-group                          
            conversion UL policy, upon conversion thereto, because the C-                              
            group term policy was in its second year ($19,025.33 x 47.5%).                             
                  The Neonatology Plan continued to pay the premiums on this                           
            policy, net of the applicable experience refund, through 1996.                             
            Effective October 15, 1996, Dr. Mall converted this policy to a                            
            fully paid, individually owned C-group conversion UL policy in                             
            the face amount of $71,102.  At the time of conversion, the C-                             
            group term policy’s conversion credit balance was $46,508.32, and                          
            $44,182.90 of that amount ($46,508.32 x 95%) was transferred to                            
            the C-group conversion UL policy for potential earning.  Dr. Mall                          
            will earn these credits in 120 equal monthly installments,                                 
            beginning October 1996.  The conversion credit balance of                                  
            $46,508.32 equaled the amount referenced in Commonwealth’s table                           
            of conversion credit values for the following variables:  (1)                              
            Business issued before February 1, 1993, (2) female, (3) issue                             
            age 46, (4) duration of 4 years 7 months, and (5) $650,000 death                           
            benefit.                                                                                   
                  3.  Mr. Mall’s Commonwealth C-Group Term Policy                                      
                  Effective March 15, 1992, Commonwealth issued a $500,000 C-                          
            group term policy (certificate No. 6010423) on the life of Mr.                             
            Mall, age 47.  The first-year premium was $10,290, and the cost                            
            of insuring Mr. Mall was $2,056.78.  The Neonatology Plan paid                             






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