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relating to each contract; (2) improperly applied average premium
rates to a number of group contracts with respect to which he
lacked premium data; and (3) improperly assumed that over time
there would be neither growth nor decline in the member size of
each group.
Another of petitioner’s experts (petitioner’s second expert)
discussed the importance of petitioner’s knowing and
understanding the historical premium payment and claim patterns
and the expectation of renewal for each separate group contract.
In comparing the relationship between an insurance company and
its individual and group customers to the relationship between a
general service provider such as a fast-food restaurant or a
supermarket and its customers, petitioner’s second expert stated
that an insurance company has a personal relationship with each
of its customers while a general service provider has a
relationship with its customer base as a whole. According to
petitioner’s second expert, this distinction is due, in part, to
the insurance company’s knowledge and information about the
unique characteristics of each of its customers including the
historical premium payment and claim patterns for each customer
and information regarding the likelihood that each customer will
or will not renew its contract with the insurance company.
Had petitioner’s valuation been undertaken at a time more
proximate to the January 1, 1987, valuation date, it is likely
that important information relating to the particular
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