-36-
establishing petitioner’s reserves in the first instance but
were asked after the fact to review petitioner’s carried
reserves, for purposes of satisfying the statutory certification
requirement.
With respect to petitioner’s 1993 taxable year, Witcraft
specified no recommended range of reasonableness (unlike the
taxpayer’s actuary in Utah Medical), but instead provided a
“best estimate” that was significantly lower than petitioner’s
carried net reserve, while noting historical redundancies in
petitioner’s carried net reserves. Petitioner has not explained
the variance between this “best estimate” and the estimate
petitioner used for tax purposes.25
24(...continued)
Reserves)”. The Teufel opinions for 1994 and 1995 each state
that petitioner’s carried reserves were “computed in accordance
with accepted loss reserving standards and principles”. It is
unclear, however, whether these statements are meant to refer to
the actuaries’ assessment of computational techniques of
petitioner’s management as opposed to the actuaries’ own
computations in independently evaluating the adequacy of
petitioner’s reserves. The actuaries were not called as
witnesses to resolve such ambiguities.
25 Petitioner states on brief that it did not call its
actuaries to testify in part because “Petitioner was, and is,
satisfied with the accuracy and clarity of the qualified
actuaries’ reports.”
On brief, respondent complains about the lack of opportunity
to cross-examine the actuaries. Respondent had equal
opportunity, however, to call the actuaries as witnesses, either
as part of his case-in-chief or as rebuttal witnesses, issuing a
subpoena if necessary. Respondent chose not to. Accordingly, we
do not infer that the actuaries’ testimony would have been either
favorable or unfavorable to petitioner. See Sisson v.
(continued...)
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