Minnesota Lawyers Mutual Insurance Company and Subsidiaries - Page 25




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            petitioner’s actual unpaid losses as nearly as they could be                               
            ascertained.  On brief, respondent acknowledges that                                       
            petitioner’s case reserves are “at least facially” in compliance                           
            with the regulatory requirement that unpaid losses be calculated                           
            “based on the facts in each case.”  Sec. 1.832-4(b), Income Tax                            
            Regs.  Respondent contends, however, that petitioner has failed                            
            to establish that the portion of its total unpaid loss reserves                            
            represented by its adverse development reserve was necessary or                            
            reasonable.                                                                                
            III.  Expert Witnesses                                                                     
                  The parties each called an expert witness to opine on the                            
            reasonableness of petitioner's reserves.  We evaluate expert                               
            opinions in light of all the evidence in the record and may                                
            accept or reject the expert testimony, in whole or in part,                                
            according to our own judgment.  See Helvering v. National                                  
            Grocery Co., 304 U.S. 282, 295 (1938); Estate of Mellinger v.                              
            Commissioner, 112 T.C. 26, 39 (1999).                                                      
                  A.  Roger M. Hayne                                                                   
                  Petitioner’s expert, Roger M. Hayne (Hayne), is a                                    
            consulting actuary in the firm of Milliman & Robertson, Inc.20                             
            He is a member of the American Academy of Actuaries.  He holds a                           

                  20 Although Milliman & Robertson, Inc., is the actuarial                             
            firm that provided the Witcraft opinion and report for                                     
            petitioner’s 1993 year, there is no indication in the record that                          
            Roger M. Hayne (Hayne) was involved in the preparation of the                              
            Witcraft opinion or report.                                                                





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Last modified: May 25, 2011