United Parcel Service of America - Page 62




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          of Liberty Mutual.  This endorsement provided that the policy was           
          nonassessable.  As a nonassessable policyholder, petitioner could           
          not be assessed for Liberty Mutual's losses and expenses in                 
          excess of the premiums paid for the 1984 California workers'                
          compensation policy.  The Participating Provision Endorsement               
          also reiterated the statutory provision in California which made            
          it unlawful for Liberty Mutual to promise the future payment of             
          dividends before the expiration of the 1984 policy period, and              
          the endorsement noted that dividends are payable only as                    
          determined by the board of directors of Liberty Mutual following            
          the expiration.                                                             
               The policy also contained a Redetermination Agreement                  
          Endorsement which provided that an initial apportionment of                 
          dividends may be made from a surplus accumulated from the                   
          California workers' compensation insurance following termination            
          of the policy.  Further, the policy provided that if a subsequent           
          dividend is greater than the dividend previously paid to                    
          petitioner, Liberty Mutual shall pay to petitioner the additional           
          dividend shown to be due.  However, if the subsequent dividend is           
          less than the dividend previously paid to petitioner, petitioner            
          shall refund the amount by which the previous dividend exceeds              
          the current dividend.                                                       
               The audited premium for the policy is based upon actual                
          payroll amounts during the policy period for various job                    





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