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evidence is inadequate for us to assess the reasonableness of any
conclusion by Tillinghast as to a 10-percent implied range around
their point estimate. In any event, the evidence does not
establish that Tillinghast contemporaneously communicated with
petitioner about any such implied range.20
Sanders testified that, in his opinion, it was reasonable
for petitioner to select unpaid loss estimates on the basis of an
implied range of plus or minus 10 percent, but that he knew of no
actuarial standard of practice or guideline that suggests such a
10-percent tolerance. Although Sanders identified various
factors that might support a 10-percent tolerance, he admitted on
cross-examination that he did not know to what extent Tillinghast
had actually considered such factors in selecting its point
estimates or whether petitioner had considered such factors in
increasing Tillinghast’s point estimates by approximately 10
percent.
The AMI report addressed only petitioner’s 1993 (and not its
1994) unpaid losses. The AMI report concluded that petitioner’s
1993 unpaid loss reserves were at the “low end” of a reasonable
range. Respondent’s experts, Kilbourne and Otto, concluded that
the AMI report contained errors that caused its 1993 unpaid loss
20 Kurt Reichle testified that he could not recall that
Tillinghast ever communicated such an implied range to
petitioner. Similarly, Maurer testified that he could not recall
specific conversations that he had with anyone at Tillinghast
about such an implied range.
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