Charles C. Dockery, Donor - Page 7

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          January 10, 1992, and owned by petitioner and Crossroads'                   
          minority shareholders.                                                      
               4.   Crossroads' Annual Statements                                     
               Crossroads reported on its 1991 and 1992 annual statements             
          that it had surpluses of $6,372,038 for 1991 and $8,720,809 for             
          1992.                                                                       
                    a.   KPMG Peat Marwick's Actuarial Reports                        
               Crossroads began using KPMG Peat Marwick as an actuary to              
          prepare Crossroads' loss reserves around 1988.  KPMG Peat Marwick           
          also audited Crossroads' financial statements.  A different                 
          office of KPMG Peat Marwick audited Gulf's financial statements.            
               In analyzing Crossroads' reserves, KPMG Peat Marwick                   
          reviewed the following underlying claims data for each of the               
          self-insurer funds:  (i) Accident year cumulative amount of paid            
          and incurred losses, at historical development points; (ii)                 
          accident year cumulative number of closed and reported claims, at           
          historical development points; (iii) earned normal premium by               
          accident year; (iv) recoveries from subrogation, second injury              
          funds, and specific excess insurance, by accident year; and (v)             
          all reinsurance policies with loss exposure.                                
               After reviewing the historical data, KPMG Peat Marwick:  (i)           
          Applied standard actuarial loss development techniques, including           









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