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$100 per claim approximated $20,000,000. In Exhibits
II-1A and II-2A we have attempted to set forth the
implications of this coverage to * * * [petitioner] on
a net after tax basis. In this Exhibit we have made
the following assumptions:
1. Revenues are in equal amounts payable at mid
points of quarters;
2. Expenses as percent of gross premium = 0%;
3. Loss ratio = .299;
4. Duration (in years) to ultimate value of losses =
2;
5. Annual payout pattern - 70%, 30%;
6. Plan reimburses gross paid losses for each month
at the end of the following month;
7. Applicable Federal Income Tax rate as percentage =
46%; and,
8. Effective rate of interest per annum as percent =
12%.
Based upon these assumptions review of Exhibits II-1A
and II-2A disclose that the contribution of this
program to * * * [petitioner's] after tax earnings is
$31,001,618 at the end of the second subsequent year
when all losses are closed.
On February 24, 1983, a meeting was held at Hall's offices
in Briarcliff Manor, New York, to discuss petitioner's excess
value activity. In attendance at this meeting were: Messrs.
Danielewski, Johnson, Pat Edmunds, Jerry Stein, and Jack
McGuinness representing petitioner; Mr. Allen Dougherty, as
petitioner's attorney; and Messrs. Corde, Garrity, and Roger Wade
representing Hall. Mr. Corde prepared a memorandum dated March
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