- 36 -
Commissioner, 88 T.C. at 1059.
In sum, petitioner has failed to establish that its
selection of unpaid loss estimates almost 10 percent greater than
its actuary’s point estimates was based on reasonable methods or
assumptions. Cf. Hospital Corp. of Am. v. Commissioner, T.C.
Memo. 1997-482 (insurance company failed to establish the
reasonableness of unpaid losses where it relied upon the
extrapolation of a recommended range from fixed dollar values
contained in its actuary’s reserve analysis reports).
Accordingly, petitioner has failed to establish that its
estimates of unpaid losses, insofar as they include the almost
10-percent add-ons to Tillinghast’s point estimates, are fair and
reasonable within the meaning of the applicable regulations.
Determination of Fair and Reasonable Estimates of Unpaid Losses
Respondent’s experts’ estimates of petitioner’s unpaid
losses differ in amount not only from Tillinghast’s point
estimates but also (by a smaller margin) from respondent’s
determinations in the statutory notice.23 Contending broadly
23 The unpaid loss estimates selected by Tillinghast,
respondent (in the statutory notice), and respondent’s experts
were as follows:
Tillinghast Respondent’s Respondent’s
Year Point Estimates Determinations Experts
1993 $74,027,009 $46,508,000 $50,000,000
1994 77,029,796 45,549,000 39,000,000
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011