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During 1987 and 1988, Parthenon recorded reserves for
general and professional liability losses that were higher than
the reserves suggested in Mr. Biscoglia's letter reports to
Parthenon, while its reserves for workers' compensation liability
were lower than the actuary's figures, which reflected his view
that all of the anticipated workers' compensation liabilities
should have been recorded in the first year. The undiscounted
reserve amounts Parthenon reported on its annual statement and
the actuary recommended for Parthenon and PCIC for policy years
1987 and 1988 are as follows:
1987
General and
Workers' Professional
Compensation Liability Total
Annual Statement $50,551,000 $192,397,000 $242,948,000
Actuary's
Recommendation 67,289,000 177,730,000 245,019,000
Difference (16,738,000) 14,667,000 (2,071,000)
1988
General and
Workers' Professional
Compensation Liability Total
Annual Statement $57,417,000 $172,789,000 $230,206,000
Actuary's
Recommendation 72,217,000 143,731,000 215,948,000
Difference (14,800,000) 29,058,000 14,258,000
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