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EVC's. Generally, PIP charged 50 percent of the rate charged for
the excess value coverage offered by petitioner to its shippers.
This amounted to a price of $0.125 per $100 of coverage.
PIP declined to provide coverage to certain high-risk
shippers and also declined to provide coverage on certain types
of packages. However, PIP's marketing materials indicate that
shippers in industries with serious theft problems could still
participate, but they were charged more than $0.125 per $100 of
coverage. If such a shipper were accepted by PIP, PIP would
charge between $0.15 and $0.175 per $100 of coverage.
FFIC was responsible for payment of losses and reimbursed
PIP weekly for loss claims paid. For the years 1983 and 1984,
PIP's profit margins equaled 36 percent and 34 percent,
respectively. PIP paid approximately 64 percent and 66 percent
for 1983 and 1984, respectively, of the amounts collected to FFIC
for the parcel protection. For 1983, FFIC's gross profit margin
equaled 27 percent of the premium written.23
II. Liberty Mutual Insurance Policy
A. Insurance Policy Between Petitioner and Liberty Mutual
Liberty Mutual is a group of mutual insurance companies.
Liberty Mutual are multiline property and casualty insurers based
in Boston, Massachusetts, which operate in all 50 States and the
23The "profit margin" is equal to premiums minus claims paid
minus commissions.
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