Ferguson vs Crown Life and William Casteel - V14of23 - 244p

  • [(p2879-) - JAMES R. HICKS (called as a witness in behalf of the Defendant Crown Life) - Direct Examination by Mr. Hardesty (Crown)]
  • Life insurance, general agent
  • Father worked for Crown since 1954
  • A after graduation. I mean, seriously. That's --
    it just went straight into it.
  • 2884 - Q Okay. And what is - a general agency briefly?
    A General agency, I guess, would be kind of considered
    a a wholesaler. We marketed other insurance agents
    primarily. We do very little selling ourselves but we
    work with other agents.
  • And how many independent brokers do you work with?
    A Oh, I'd say somewhere between a hundred to 150
    typically.
  • apprenticeship type of system in a lot of cases.
  • Q How did communications work between the home office
    and agents and brokers?
  • really weren't part of that pipeline.
  • 2926  - And to the point that it was -- they had been paying out
    about, oh, anywhere from 60 to 80 percent higher, over a
    20-year period, than they had projected.
  • 2926 - Okay. If Mr. Casteel told Mr. Ferguson and Mr. Love
    in 1987 that Crown Life had never failed to meet its
    dividend projections, would that have been a true
    statement?
    A Yes.
  • 2928 - Q Right. Could you tell a potential buyer, Look, we're
    paying out more than this?
  • 2932 - Q
    A
    Q
    Have you sued Crown Life?
    No.
    As a policyholder, how does litigation like this
    affect you?
    A Besides time, but the main thing is it affects the
    cost of -- all this has to come out of -- it doesn't grow
    on trees. The money has to come out of the -- the company
    coffers and everything, which is basically the dividends.
    So it affects the contracts that myself and my family
  • 2933 - (Exhibit No. 82. - Universal Life Illustration - Single Premium - Second to die - 
  • 2934 - Exhibit No. 83 - Sun Life Illustration - 
  • 2936 - {Exhibit No. 84 - 
  • 2938-2939 - Q - Now, Mr. Lawyer, whom the Plaintiffs called, has said
    that interest rates will probably be around -- between seven and eight percent in the future. Using that
    assumption, will the illustrations that you prepared
    perform as illustrated?
    A Yes. Yes, they would.
  • 2940 - Q Mr. Mateja, who was just on before you, testified
    that if the Fergusons don't pay anymore premiums, that
    their policy will lapse in the 16th year or maybe some in
    the 15th year, but certainly no earlier than Year 15.
    Have you done a comparison to see what it would have cost
    the Fergusons to buy a 15-year policy in 1987?
  • 2941 - Defendant's Exhibit 85 - A Yes. These are two illustrations with First Colony, another company that we deal with, on a 15-year level term.
  • 2943 - And what does Exhibit 85 show as a
    cost to the Fergusons, assuming this policy could have
    been bought in 1987 for a term of 15 years?
    A There's two sheets, because this is an individual
    life product. So you've got one on Mr. Ferguson and one
    on Mrs. Ferguson. Both of them age 38, and it's showing
    that on his 5 million, it would have been about $5420
    every year, guaranteed for 15 years. It could not change.
    And on hers, it would be $4620 guaranteed for 15 years.
    Q What's the total of all that?
    A For a total of about 10,000 a year. So over a
    15-year period, about 150,000, a little over 150.
    Q And how much did the Fergusons pay for 15 years of
    coverage from Crown Life, assuming they don't pay anymore?
    A I think it's somewhere under $100,000, 92,000
    somewhere in there.
  • 2944 - Q
    Yes.
    Is Mr. Casteel still receiving commissions on the
    Ferguson policy and on the other policies that are the
    subject of the lawsuits?
    A Yes.
  • 2944 - (Exhibit No. 255 - Big Best Book
    • A That's a copy of a -- what we call the Big Best Book
      of -- that goes through all the different insurance
      companies.
  •  
  • 1995 0905 
  • DEFENDANT BILL CASTEEL'S DIRECT EVIDENCE
  • JOSEPH FRANK ZULLO
    • Direct Examination by Mr. Deshazo------------------ 2723
    • Cross-Examination by Mr. Becker-------------------- 2732
  • DEFENDANT CROWN LIFE'S DIRECT EVIDENCE - CONTINUED
  • MICHAELE. MATEJA (Continued)
    • Direct Examination (Contd.) by Mr. Becker---------2740
    • Cross-Examination by Mr. Bostwick-----------------2790
    • Cross-Examination (Contd.) by Mr. Bostwick--------2826
    • Redirect Examination by Mr. Becker-----------------2870
  • JAMES R. HICKS
    • Direct Examination by Mr. Hardesty----------------2879
    • Cross-Examination by Mr. Bostwick------------------2944