- 43 -
Dr. Sobo died on September 23, 1993. On December 14, 1993,
the Lakewood Plan paid $150,000 to Bonnie W. Sobo (Ms. Sobo) as
the beneficiary of this policy.
7. Dr. McManus’ Commonwealth C-Group Term Policy
Effective October 31, 1991, Commonwealth issued a $2.1
million C-group term policy (certificate No. 6001004) on the life
of Dr. McManus, age 34. The first-year premium was $18,186, and
the cost of insuring Dr. McManus for that year was $4,496.72.
The Lakewood Plan paid the first-year premium, and, at the end of
that year, the conversion credit balance was $14,305.30 ($18,186
- $4,496.72 + $616.02); the $616.02 is the interest of 4.5
percent earned on the conversion credit balance (($14,305.30 -
$616.02) x 4.5% = $616.02)). None of the conversion credit
balance 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 first year.
The second-year premium, before any experience refund, was
$18,186. The policy was credited with an experience refund of
$265.36, and the Lakewood Plan paid the net premium of $17,920.64
($18,186 - $265.36). The cost of insuring Dr. McManus for the
second year was $4,465.82, and, at the end of that year, the
conversion credit balance was $29,286.63 ($14,305.30 + $18,186 -
$4,465.82 + $1,261.15); the $1,261.15 is the interest of 4.5
percent earned on the conversion credit balance (($29,286.63 -
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