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Mr. Biscoglia's reserve analysis report for the policy year 1986
addresses only professional and general liability reserves, he
cannot render an opinion as to the adequacy of the total loss and
loss expense reserves of Parthenon. Additionally, respondent
contends that petitioners' computations that are based on Mr.
Biscoglia's 1986 report are not relevant to the fairness and
reasonableness of the unpaid losses reserves because Mr.
Klaassen, not Mr. Biscoglia, served as Parthenon's actuary for
year ended 1986. Respondent contends further that Mr. Klaassen's
computations are erroneous because they are based on an
occurrence policy rather than a claims-made policy. Respondent
maintains that the adjustments to the unpaid losses reserves
proposed by Mr. Merlino are correct.
Petitioners contend that Mr. Biscoglia's reserve analysis
reports are relevant even though they address both Parthenon and
PCIC because the relevant question in the consolidated return
setting is whether the total reserves for both companies are
reasonable in each applicable year. Additionally, petitioners
contend, the 1986 annual statements of Parthenon and PCIC show
the respective reserve amounts that each booked.
Mr. Merlino did not calculate independently the amount or
range that he believes represents a fair and reasonable estimate
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