-40- part, revg. in part on another issue, and remanding 70 T.C. 944 (1978); Hanover Ins. Co. v. Commissioner, 69 T.C at 272. 4. Hayne’s Testimony The testimony of petitioner’s expert, Hayne, falls short in assisting the Court in determining whether petitioner’s estimates of unpaid losses were fair and reasonable, or what estimates might be fair and reasonable. He did not opine on the ultimate value of petitioner’s unpaid losses. His testimony suggests that because of the low volume and volatility of petitioner’s claims data, almost any estimate within a very wide range might have statistical credibility. His report implies, for example, that for petitioner’s 1995 year, any estimate in a range from $4.8 million to $39.2 million might be considered reasonable. Hayne’s testimony is difficult to square with petitioner’s qualified actuary reports. These reports reflect the application of a variety of standard actuarial techniques to arrive at best estimates or selected point estimates.28 Moreover, Hayne’s premise as to the volatility of petitioner’s data is difficult to square with Bixler’s September 1996 statement to petitioner’s shareholders that “we have had the opportunity to observe the loss activity in each band of risk and have found many of the lower layers to be relatively stable 28 The Witcraft report was prepared by another actuary in the same actuarial firm with which Hayne is affiliated. Hayne testified that he had no reason to believe that Witcraft did not do her analysis properly.Page: Previous 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Next
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