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that his experts’ estimates confirm the estimates reflected in
the statutory notice, respondent urges us to sustain his
determinations.
On brief, respondent’s primary criticism of Tillinghast’s
methodology relates to Tillinghast’s use of “prior selections”.
Respondent’s complaint, in essence, is that instead of
calculating petitioner’s unpaid losses by averaging the results
indicated by the five specific actuarial methods that it
employed, Tillinghast improperly inflated the final result by
factoring in the higher ultimate loss estimates that Tillinghast
had selected in the preceding year.
We are unpersuaded by respondent’s criticisms of
Tillinghast’s actuarial methods. Reichle and petitioner’s
experts offered credible testimony that the weighing of prior
selections was standard practice in the industry and was
justified in the present circumstances.24 The Coopers auditors
determined that Tillinghast’s estimates and assumptions were
reasonable. On the basis of the record before us, we decline to
second-guess Tillinghast’s professional judgment that
consideration of prior-year loss estimates was a reasonable guard
against overoptimism where trends in medical malpractice
24 For example, Owen Gleeson testified that it would not
have been reasonable for Tillinghast to have stopped with the
results derived from its five specific actuarial methods, and
that it was “necessary” for Tillinghast to consider its prior
selections.
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