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$221 million by approximately $50 million to correct for Mr.
Klaassen's use of occurrence policy factors in formulating his
estimate. Mr. Merlino ignored the $218 million to $250 million
range that Mr. Biscoglia recommended for the general and
professional liability reserves for the 1986 policy year because
of Mr. Merlino's belief that Mr. Klaassen served as Parthenon's
consulting actuary for purposes of establishing the unpaid losses
reserves for that year. That belief is based on the fact that
Mr. Klaassen certified the adequacy of the reserves for the 1986
policy year.
The assumption that Mr. Klaassen served as Parthenon's
actuary for purposes of establishing the 1986 policy year unpaid
losses reserve levels is not supported by the record. The
recommended reserve levels generally are calculated shortly after
the close of the policy year for which the reserves relate. Both
Mr. Klaassen and Mr. Biscoglia testified that Mr. Biscoglia
replaced Mr. Klaassen as Parthenon's actuary during 1986.
Additionally, the reserve recommendation report prepared by Mr.
Klaassen for the 1986 policy year specifically states that he was
requested to supply a second opinion relating to the reserves for
professional liability losses and loss expenses as of the end of
1986. Based on the foregoing, we are persuaded that Mr.
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