- 46 -
characteristics of each group contract would have been available
for use in the valuation of the group contracts.
In order for the valuation of petitioner’s health insurance
group contracts to reflect a discrete value for each group
contract, the premium payment and claim patterns and the
information relating to renewal expectations for the separate
contracts were necessary and should have been available for use
by petitioner’s expert in the valuation.
Of petitioner’s 11,070 group contracts involving basic
medical and/or basic hospital coverage in effect on January 1,
1987, petitioner lacked information regarding premium rates on
9,288 of the group contracts. In light of this missing
information, petitioner’s expert derived an average premium rate
from petitioner’s 1,782 group contracts involving basic medical
and/or basic hospital coverage for which petitioner did have
available premium rate information. These 1,782 group contracts
with premium rate information consisted of both community-rated
and experience-rated group contracts and varied in benefit type
between individual, parent with children, and family. The
monthly premiums for these contracts ranged from a low of $29.83
to a high of $115.79. From these 1,782 group contracts involving
basic medical and/or basic hospital coverage, petitioner’s expert
derived his average monthly premium rate of $55.42.
Petitioner’s expert then assumed that each of the 9,288
group contracts involving basic medical and/or basic hospital
coverage with respect to which petitioner lacked premium
Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 NextLast modified: May 25, 2011