In Acuity, A Mutual Ins. Co. v. Commissioner, T.C. Memo. 2013-209, the Tax Court held that the amount of carried loss reserves claimed by an insurance company under Section 832 was fair and reasonable because it was actuarially computed in accordance with the rules of the National Association of Insurance Commissioners (NAIC) and Actuarial Standards of Practice (ASOPs) and fell within a range of reasonable estimates determined by the company’s appointed outside actuary. The case sheds light on the standards a company must meet to establish its reserves are fair and reasonable, and calls into the question the IRS practice of asserting there is an ‘implicit margin’ solely because the IRS’s own actuaries determine that reserves should be lower.