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During 1985 and subsequent years, PCIC issued policies to
individual physicians. The employees of New Parthenon and PCIC
during 1985 were basically the same and they continued to service
the pre-1985 captive block of insurance, which had continued on
PCIC's books after the name change and new underwriting
direction. PCIC and New Parthenon entered into an intercompany
pooling agreement during 1985 whereby each ceded to and assumed
reinsurance from the other, with the end result that risks
written by the entities combined were shared on an 85/15 basis.
New Parthenon and PCIC executed a portfolio transfer
reinsurance agreement during 1986, to realign each company's
portfolio of business to correspond more nearly to the primary
business purpose of each company. The net result sought by the
portfolio transfer was to place the captive insurance business
from the beginning with New Parthenon and the physicians'
insurance business from the beginning with PCIC. Effective April
15, 1988, HCA sold all of its shares of PCIC to an unrelated
purchaser under an agreement whereby, by executing a reinsurance
contract, New Parthenon acquired PCIC's pre-sale physicians'
insurance business.
The combined capital and surplus for both New Parthenon and
PCIC, where appropriate, for the years 1977 through 1988, is as
follows:
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