- 101 -                                        
                    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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