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CCH (cch.taxgroup.com) reports:

  Premiums paid by an S corporation on an employer-owned key-man life insurance policy, of which the S corporation is either a direct or indirect beneficiary, do not reduce the S Corporation's accumulated adjustment account (AAA). Conversely, benefits received by reason of death of the insured from an employer-owned life insurance policy that meets an exception under Code Sec. 101(j)(2) do not increase the S corporation's AAA.

Rev. Rul. 2008-42, 2008FED ¶46,503

Other References:

 
Code Sec. 101

  CCH Reference - 2008FED ¶6504.022

  CCH Reference - 2008FED ¶6504.44

 
Code Sec. 1368

  CCH Reference - 2008FED ¶32,121.20

  Tax Research Consultant

  CCH Reference - TRC COMPEN: 48,064
CCH Reference -
TRC SCORP: 450
CCH Reference - TRC SCORP: 458.05