-32-
losses for coverage years 1987 through 1992, reestimated at the
end of 1996.
Respondent's argument misses the mark. Although we agree
that Kilbourne's method is reasonable, we need not decide whether
his method is more reasonable than petitioner's method. Section
1.832-4(b), Income Tax Regs., requires that the taxpayer show
that its unpaid losses were actual unpaid losses and that its
estimate of loss reserves be fair and reasonable. Petitioner has
satisfied the requirements of the regulations, and thus our
inquiry ends. Cf. Molsen v. Commissioner, 85 T.C. 485, 498
(1985); Peninsula Steel Prods. & Equip. Co. v. Commissioner, 78
T.C. 1029, 1045 (1982) (the Commissioner cannot require a
taxpayer to change from an accounting method which clearly
reflects income to an alternate method merely because the
Commissioner concludes that the alternate method more clearly
reflects the taxpayer's income).
8. Whether Gleeson Confirmed That Hurley's Ranges Were Not
Actuarially Sound
Respondent argues that Gleeson confirmed Kilbourne's
conclusion that Hurley's ranges were not actuarially sound.23 We
disagree. Gleeson applied a probability distribution test to
23 Kilbourne said that Hurley's approach ignored the point
estimate results of his four actuarial methods and that his
ranges were skewed so that even the low ends of his ranges as of
the end of 1991 and 1992 were higher than what in Kilbourne's
opinion were actuarially reasonable "best estimates" of
petitioner's ultimate losses.
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