-20-
gross and net reserve point estimates) are shown below (in
millions of dollars):
Estimates of Reinsurance Proceeds Recoverable
Petitioner’s Actuaries’
Year Estimate Estimate
1993 $4.397 $6.9
1994 4.507 4.804
1995 4.255 5.863
Petitioner’s Tax Returns and Respondent’s Determinations
Petitioner timely filed Forms 1120PC, U.S. Property and
Casualty Insurance Company Income Tax Return, for 1993, 1994,
and 1995.
Respondent determined that for each year petitioner
overstated its unpaid losses for professional liability
insurance.17 The following table shows the unpaid losses
outstanding at yearend (net of reinsurance and before
discounting) on professional liability insurance, as reported by
petitioner and as allowed by respondent for each year in issue:
Year Reported by petitioner Allowed by respondent
1993 $11,663,000 $7,134,000
1994 11,576,000 5,531,000
1995 12,490,000 5,010,000
17 For each year in issue, petitioner also claimed losses
incurred with respect to its commercial multiple peril policies,
as follows: 1993-–$3,000; 1994-–$5,000; and 1995--$9,000.
Respondent did not adjust the unpaid losses claimed by petitioner
on these policies.
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