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respondent's view, therefore, the decision of the conference
committee to reject the language contained in the Senate report
does not create a "conflict" but instead provides the rationale
for the final legislation.
Second, respondent addresses the Court's concern that the
conference committee's definition of "reserve strengthening" is
internally contradictory. The Court found that the conference
committee's definition of the term is "broader than necessary to
accomplish the stated purpose of preventing abuse from artificial
increases". Western Natl. Mut. Ins. Co. v. Commissioner, 102
T.C. at 350. Respondent contends that this point does not
undermine her position, because Congress sometimes finds it
expedient to adopt bright-line rules that do not in every case
effectuate congressional intent precisely.
Because respondent believes that the statute is ambiguous
and the regulations in issue effectively implement the conference
committee's definition of "reserve strengthening", she maintains
that the regulations reflect a reasonable and permissible
construction of the statute.
Respondent argues in the alternative that, if we hold that
"reserve strengthening" includes only those increases in reserves
attributable to changes in methodology or assumptions, we should
determine a lesser deficiency, because all or some of
petitioner's additions to its IBNR and LAE reserves resulted from
management's discretionary adjustments.
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