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February 17, 1987 (1986 report), that had been prepared
previously for Parthenon. In his expert witness report, Mr.
Biscoglia concluded that the 1986 report had employed accepted
and commonly used actuarial techniques, methodologies, and
assumptions. He further concluded that the aggregate $187
million discounted reserves carried by Parthenon and PCIC for
year ended 1986 were reasonable relative to the $176 million to
$203 million range for the discounted reserves that was estimated
for both companies in the 1986 report.
Additionally, petitioners contend that the reserves recorded
on Parthenon's annual statements for years ended 1987 and 1988
represent fair and reasonable estimates of the loss and loss
expense payments that Parthenon would be required to make in
future years. In support of that contention, petitioners rely on
the reserve analysis reports Mr. Biscoglia prepared during 1988
(for 1987 reserve requirements) and 1989 (for 1988 reserve
requirements).
Respondent contends that the reserve analysis reports
prepared by Mr. Biscoglia are irrelevant because they deal with
both Parthenon and PCIC and the reserves applicable to each
company cannot be segregated from the overall reserves applicable
to both of them. Respondent contends further that, inasmuch as
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