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actuaries.8 For exposures above Parthenon's retained limits, the
reinsurers set their own premium requirements.
Premium rates for liability coverages were designed to be
applied to an exposure base consisting of licensed beds (after
1981, average occupied beds), emergency room patient visits (for
those hospitals choosing emergency room physicians' coverage),
and (after 1981) outpatient visits. The rates to be applied to
the exposure base were adjusted to reflect relative risk exposure
by geographical area, on the basis of loss information available
to the consulting actuary. Parthenon's rate manuals also
contained schedules allowing for the application of debits or
credits against the published rates to reflect specific
conditions affecting the risk of any particular hospital.
On a quarterly basis, Parthenon's accounting personnel
applied the determined rates to the corresponding exposure units
from the latest available census of patient information from each
hospital and billed HCA for the total premium amount thus
determined, and also the premiums attributable to the reinsurance
8 The parties stipulated that Wyatt Co. (Wyatt) provided
actuarial services to Parthenon through policy year 1986 and that
Mr. Biscoglia provided actuarial services for policy years after
1986. Both Mr. Klaassen and Mr. Biscoglia, however, testified
that Wyatt was replaced during 1986 and other evidence in the
record clearly supports a finding that Mr. Biscoglia provided
some actuarial services for Parthenon for a portion of that year.
Although we do not lightly disregard the stipulations of the
parties, when appropriate, we may do so where the stipulated
facts are clearly contrary to facts disclosed by the record.
Jasionowski v. Commissioner, 66 T.C. 312, 318 (1976).
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