- 10 - conducted a yearend audit of petitioner’s 1993 and 1994 financial statements. 1993 Audit In connection with the Coopers yearend 1993 audit of petitioner’s financial statements, Coopers actuary Chris Nelson (Nelson) reviewed a draft of Tillinghast’s 1993 report, Tillinghast’s 1993 rate review, and certain underlying exposure data from petitioner. On the basis of his review, Nelson concluded that Tillinghast’s actuarial methodologies and assumptions in estimating petitioner’s unpaid losses were “appropriate and reasonable.” In addition, Nelson reviewed petitioner’s carried unpaid losses for 1993. Nelson noted that these carried unpaid losses were 9.9 percent above the Tillinghast point estimate. Nelson concluded that this deviation was acceptable from an actuarial perspective, indicating that a reserve range of minus 5 percent to plus 10 percent was common for Tillinghast analyses. After consulting with Nelson, Coopers’s nonactuarial auditors concluded that petitioner’s unpaid losses on its 1993 annual statement exceeded the range suggested under Coopers’s in- house guidelines. These guidelines specified a mechanical formula which the Coopers auditors used to test whether petitioner’s recorded reserves were realistic and meaningful. After further assessment, however, the Coopers auditorsPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011