In February 2005, insurance broker Wesley Chesson submitted an application to Plaintiff Columbus Life Insurance Company (“Columbus Life”) for a life insurance policy on behalf of Dr. Earl Trevathan, Jr. The application, which was purportedly executed by Dr. Trevathan in Greenville, North Carolina, sought a $1 million policy with a $1 million rider, naming Dr. Trevathan as the initial owner and Dr. Trevathan’s estate as the initial beneficiary.

On March 31, 2005, Chesson transmitted a check in the amount of the Policy’s first premium payment ($94,190.16) to Columbus Life, drawn on the account of an entity named E&W, LLC.

Unbeknownst to Columbus Life at the time the Policy was issued in 2005: Dr. Trevathan was not in the market for life insurance and was not in a financial position to afford premiums on a $2 million life insurance policy. Chesson had explained to Dr. Trevathan that a large policy could be procured on his life at no cost to him and that the policy would be sold to an investor.

Trevathan only allowed the Policy to be procured because he would not be paying premiums and because the Policy was to be sold to an investor, the entity that paid the premiums on the Policy, E&W, did so through a non-recourse premium finance loan to Dr. Trevathan under the terms of the loan from E&W, Dr. Trevathan was under no obligation to pay premiums on the Policy and pursuant to the terms of the loan, Dr. Trevathan gave an immediate collateral assignment of the Policy to E&W.

On or about February 12, 2007, Columbus Life received written notification from Chesson’s office that E&W’s collateral assignment had been released effective February 8, 2007. In June 2007, Columbus Life received a written request to change the Policy’s owner and beneficiary to Church Street Nominees Limited. In June 2012, ownership of the Policy was once again changed—this time to Defendant Wells Fargo Bank, N.A. (“Wells Fargo”), as securities intermediary for the owner of the Policy, Defendant.

Having subsequently discovered the above-described circumstances under which the Policy was originally procured, Columbus Life now seeks a declaratory ruling from this Court that the policy was void as the product of a “stranger-originated life insurance” (“STOLI”) scheme.