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March 13, 2012

Oklahoma St. Loses Millions on Life-Insurance Fundraising Plan

A federal judge has ruled that Oklahoma State University cannot recoup tens of millions of dollars it spent on life-insurance policies on athletics boosters as part of a unique fundraising scheme, the Associated Press reports.

Oklahoma State took out $10-million policies on more than two dozen boosters as part of the "Gift of a Lifetime" program launched in 2007 at the advice of the longtime university patron T. Boone Pickens. According to court filings, the school believed it could collect as much as $350-million when the participating boosters died.

The university decided to abandon the program three years ago and sued to recoup the $33-million in premiums it had paid to Lincoln National Life Insurance. The university claimed that because Lincoln National did not provide actual copies of the policies until 2009, it had a right to the money under a state law allowing insurance buyers to cancel and get a refund within 10 days of purchase.

But Judge Jorge A. Solis ruled that the 10-day window did not apply because the school's athletic director signed receipts for delivery of the policies in 2007 and did not ask to see full copies. The school paid more than $16-million a year in premiums in each of the next two years.