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A. Everything else in the transaction was the
same except that the ownership of OPL was different, it
was totally unrelated?
Q. And from an insurance pricing perspective,
the question is whether that -- the transaction would
make sense from UPS's perspective.
A. That's a little difficult to answer. It
would be very strange to think if UPS had the
opportunity to sell insurance, either directly or
indirectly, at the prices which were prevailing in that
marketplace at that time, it would be a rather strange
business decision to basically give off that profit to
an outsider.
As previously explained, in 1984 the EVC's billed by
petitioner were $99,794,789.67 and claims paid were
$22,084,011.93. Thus, claims paid in 1984 represented
approximately 22 percent of the total EVC's billed.57 Claims
paid during the years 1979 through 1983 represented approximately
28.6 percent of the total EVC's billed during those years. After
carefully considering the entire record, including the expert
reports offered by both petitioner and respondent, we are
persuaded that the price of 25 cents per $100 of excess value
liability paid to NUF pursuant to the Shippers Interest contract
that petitioner and NUF agreed to was not a result of arm's-
57 $22,084,011.93 divided by $99,794,789.67 equals
approximately 22 percent. When claims are added to fronting
expenses of $1,000,000 and taxes and board and bureau charges of
$4,091,586 for 1984, the claims and fees increase to
$27,175,597.93, and the ratio increases from 22 percent to
approximately 27 percent. $22,084,011.93 plus $1,000,000 plus
$4,091,586 equals $27,175,597.93.
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