Minnesota Lawyers Mutual Insurance Company and Subsidiaries - Page 20




                                                -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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