- 24 -
T.C. 58, 78 (1971); Minn. Lawyers Mut. Ins. Co. v. Commissioner,
T.C. Memo. 2000-203. This does not mean that there is (or could
be, except in hindsight) a single “correct” estimate.14 It does
mean, however, that the taxpayer must be prepared to objectively
validate that the methods and assumptions it relied upon to make
its estimate are reasonable. See Minn. Lawyers Mut. Ins. Co. v.
Commissioner, supra (the taxpayer failed to establish the
necessity or appropriateness of a bulk “adverse development
reserve” that its management established as an addition to the
case reserves determined by its claim department); cf. Vinson &
Elkins v. Commissioner, 99 T.C. 9, 57 (1992) (in the context of
pension plan regulation, the section 412(c)(3) requirement that
actuarial estimates be reasonable and offer the actuary’s “best
estimate” of actuarial experience does not connote a single “best
estimate” but instead requires validation of actuarial
assumptions in choosing a reasonable range and in selecting a
value within the range), affd. 7 F.3d 1235 (5th Cir. 1993).
The Expert Witnesses
Both parties called expert witnesses to offer their opinions
regarding the reasonableness of petitioner's unpaid loss
estimates. We evaluate expert opinions in light of all the
14 For example, this Court has rejected an argument that the
midpoint of an actuarially sound range is the only fair and
reasonable estimate. See Utah Med. Ins. Association v.
Commissioner, T.C. Memo. 1998-458.
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