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This conclusion is also supported by comparing the 25-cent
price paid to NUF with the price that was offered by FFIC and
PIP. For more than 15 years before 1983, FFIC, through a policy
sold by PIP, solicited and sold excess value coverage to
petitioner's shippers. Generally, PIP sold the excess value
coverage at a price of $0.125 per $100 of coverage. PIP retained
approximately 36 percent of the premium in 1983 and 34 percent in
1984. Thus, of the $0.125 per $100 of coverage, PIP retained
approximately $0.045 and $0.0425 in 1983 and 1984,
respectively.51 On the other hand, FFIC underwrote the coverage
for approximately 8 cents52 per $100 of coverage in 1983 and
$0.082553 in 1984. FFIC was able to realize a gross profit
margin of 27 percent in 1983, based on an approximate price of 8
cents per $100 of excess value coverage.54 The FFIC/PIP program
50(...continued)
petitioner's loss ratios and declared revenues for 1981 through
1983, Mr. Cohen stated in his expert report:
In my experience spanning more than thirty years I
cannot recall one case where the broker would offer the
insurer on behalf of his client a piece of business at
such an advantageous rate. * * *
51The $0.125 price times 36 percent and 34 percent equals
$0.045 and $0.0425, respectively.
52$0.125 less $0.045 equals $0.08.
53$0.125 less $0.425 equals ($0.0825).
54Gross profit margin in this instance is defined as
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