Internal Revenue Bulletin:  2004-2 

January 12, 2004 

Rev. Proc. 2004-9


SECTION 1. PURPOSE

This revenue procedure prescribes the loss payment patterns and discount factors for the 2003 accident year. These factors will be used for computing discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2003-17, 2003-6 I.R.B. 427, for background concerning the loss payment patterns and application of the discount factors.

SECTION 2. SCOPE

This revenue procedure applies to any taxpayer that is required to discount its unpaid losses under § 846 for a line of business using discount factors published by the Secretary.

SECTION 3. TABLES OF DISCOUNT FACTORS

.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2003. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2003, which is 5.27 percent, and by assuming all loss payments occur in the middle of the calendar year.

.02 If the groupings of individual lines of business on the annual statement change, taxpayers must discount the unpaid losses on the affected lines of business in accordance with the discounting patterns that would have applied to those unpaid losses based on their classification on the 2000 annual statement. See Rev. Proc. 2003-17, 2003-6 I.R.B. 427, section 2, for additional background on discounting under section 846 and the use of the Secretary's tables.

.03 Section V of Notice 88-100, 1988-2 C.B. 439, sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. The tables separately provide discount factors for taxpayers who elect to use the composite method of section V of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. I.R.B. 980.

.04 Tables

Accident and Health (Other Than Disability Income or Credit Disability Insurance)
           
Taxpayers that do not use the composite method of Notice 88-100 should use 97.4648 percent to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the 2003 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 97.4648 percent to discount all unpaid losses that are incurred in this line of business and that are outstanding at the end of the 2003 tax year.
Auto Physical Damage
Tax Year Estimated CumulativeLosses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 89.6468 89.6468 10.3532 10.0680 97.2455
2004 99.6845 10.0377 0.3155 0.2998 95.0251
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2005 and later years 0.1578 0.1578 0.1538 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 97.4648 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2005 tax year.
Commercial Auto/Truck Liability/Medical
Tax Year Estimated CumulativeLosses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 28.8244 28.8244 71.1756 64.4355 90.5304
2004 54.9871 26.1626 45.0129 40.9881 91.0586
2005 72.8039 17.8168 27.1961 24.8680 91.4393
2006 85.0572 12.2533 14.9428 13.6065 91.0568
2007 91.6276 6.5704 8.3724 7.5822 90.5618
2008 94.9514 3.3239 5.0486 4.5715 90.5501
2009 97.0453 2.0938 2.9547 2.6641 90.1639
2010 98.1574 1.1121 1.8426 1.6635 90.2768
2011 98.7370 0.5796 1.2630 1.1564 91.5620
2012 99.1070 0.3700 0.8930 0.8378 93.8128
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   0.3700 0.5230 0.5023 96.0372
2014 and later years 0.3700 0.1530 0.1492 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 96.3144 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Composite
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 40.9985 40.9985 59.0015 52.3463 88.7203
2004 65.8439 24.8454 34.1561 29.6133 86.6999
2005 77.5023 11.6583 22.4977 19.2123 85.3966
2006 84.6221 7.1198 15.3779 12.9198 84.0151
2007 90.2455 5.6234 9.7545 7.8309 80.2805
2008 92.2780 2.0325 7.7220 6.1583 79.7500
2009 94.3974 2.1195 5.6026 4.3083 76.8980
2010 95.2526 0.8552 4.7474 3.6579 77.0504
2011 96.2792 1.0266 3.7208 2.7973 75.1817
2012 96.4323 0.1531 3.5677 2.7877 78.1369
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   0.1531 3.4145 2.7774 81.3423
2014   0.1531 3.2614 2.7667 84.8321
2015   0.1531 3.1083 2.7554 88.6476
2016   0.1531 2.9551 2.7435 92.8384
2017 and later years 0.1531 2.8020 2.7310 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 87.9561 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Fidelity/Surety
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 38.3328 38.3328 61.6672 57.1422 92.6623
2004 58.8485 20.5156 41.1515 39.1043 95.0251
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2005 and later years 20.5758 20.5758 20.0541 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 97.4648 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2005 tax year.
Financial Guaranty/Mortgage Guaranty
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 4.0723 4.0723 95.9277 89.2327 93.0207
2004 40.7639 36.6916 59.2361 56.2892 95.0251
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2005 and later years 29.6180 29.6180 28.8672 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 97.4648 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2005 tax year.
International (Composite)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 40.9985 40.9985 59.0015 52.3463 88.7203
2004 65.8439 24.8454 34.1561 29.6133 86.6999
2005 77.5023 11.6583 22.4977 19.2123 85.3966
2006 84.6221 7.1198 15.3779 12.9198 84.0151
2007 90.2455 5.6234 9.7545 7.8309 80.2805
2008 92.2780 2.0325 7.7220 6.1583 79.7500
2009 94.3974 2.1195 5.6026 4.3083 76.8980
2010 95.2526 0.8552 4.7474 3.6579 77.0504
2011 96.2792 1.0266 3.7208 2.7973 75.1817
2012 96.4323 0.1531 3.5677 2.7877 78.1369
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   0.1531 3.4145 2.7774 81.3423
2014   0.1531 3.2614 2.7667 84.8321
2015   0.1531 3.1083 2.7554 88.6476
2016   0.1531 2.9551 2.7435 92.8384
2017 and later 0.1531 2.8020 2.7310 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 87.9561 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Medical Malpractice —Claims-Made
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 7.3447 7.3447 92.6553 80.8929 87.3052
2004 29.0191 21.6744 70.9809 62.9178 88.6404
2005 53.3108 24.2917 46.6892 41.3100 88.4786
2006 69.1517 15.8409 30.8483 27.2341 88.2838
2007 82.0981 12.9464 17.9019 15.3861 85.9469
2008 86.3995 4.3014 13.6005 11.7837 86.6415
2009 89.7111 3.3116 10.2889 9.0069 87.5404
2010 92.4688 2.7577 7.5312 6.6522 88.3283
2011 94.5163 2.0475 5.4837 4.9020 89.3920
2012 95.7635 1.2471 4.2365 3.8807 91.6012
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   1.2471 2.9894 2.8056 93.8535
2014   1.2471 1.7422 1.6739 96.0782
2015 and later years 1.2471 0.4951 0.4825 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 94.5587 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Medical Malpractice —Occurrence
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 0.8316 0.8316 99.1684 80.5880 81.2638
2004 7.4573 6.6257 92.5427 78.0369 84.3253
2005 23.5575 16.1002 76.4425 65.6305 85.8560
2006 41.0062 17.4487 58.9938 51.1867 86.7661
2007 55.5832 14.5770 44.4168 38.9280 87.6425
2008 68.9413 13.3581 31.0587 27.2740 87.8142
2009 78.2095 9.2682 21.7905 19.2020 88.1210
2010 82.8727 4.6632 17.1273 15.4294 90.0869
2011 86.3178 3.4451 13.6822 12.7078 92.8788
2012 91.0834 4.7656 8.9166 8.4880 95.1933
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013 and later years 4.7656 4.1510 4.0457 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 97.4648 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Miscellaneous Casualty
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 79.7790 79.7790 20.2210 19.3443 95.6645
2004 94.9417 15.1627 5.0583 4.8067 95.0251
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2005 and later years 2.5292 2.5292 2.4650 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 97.4648 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2005 tax year.
Multiple Peril Lines (Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability (Ocean Marine, Aircraft (All Perils), Boiler and Machinery))
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 59.7445 59.7445 40.2555 36.6385 91.0149
2004 81.0347 21.2902 18.9653 16.7253 88.1893
2005 87.3325 6.2978 12.6675 11.1451 87.9825
2006 91.0659 3.7334 8.9341 7.9020 88.4479
2007 95.1781 4.1122 4.8219 4.0993 85.0140
2008 95.7605 0.5824 4.2395 3.7177 87.6937
2009 97.0539 1.2933 2.9461 2.5867 87.7996
2010 97.6441 0.5903 2.3559 2.1174 89.8774
2011 98.7037 1.0596 1.2963 1.1418 88.0851
2012 98.6217 -0.0821 1.3783 1.2862 93.3151
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   0.5226 0.8558 0.8178 95.5652
2014 and later years 0.5226 0.3332 0.3247 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 96.3076 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Other (Including Credit)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 69.1729 69.1729 30.8271 29.4135 95.4143
2004 91.2168 22.0439 8.7832 8.3463 95.0251
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2005 and later years 4.3916 4.3916 4.2803 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 97.4648 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2005 tax year.
Other Liability — Claims-Made
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 14.9618 14.9618 85.0382 72.6837 85.4719
2004 36.2113 21.2494 63.7887 54.7120 85.7706
2005 54.2876 18.0763 45.7124 39.0488 85.4227
2006 64.2163 9.9288 35.7837 30.9196 86.4071
2007 73.2732 9.0569 26.7268 23.2566 87.0162
2008 80.5748 7.3016 19.4252 16.9907 87.4675
2009 87.6200 7.0452 12.3800 10.6577 86.0880
2010 89.9155 2.2955 10.0845 8.8641 87.8987
2011 93.3946 3.4791 6.6054 5.7616 87.2268
2012 94.6170 1.2223 5.3830 4.8111 89.3763
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   1.2223 4.1607 3.8106 91.5850
2014   1.2223 2.9383 2.7572 93.8366
2015   1.2223 1.7160 1.6484 96.0612
2016 and later years 1.2223 0.4936 0.4811 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 92.3191 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Other Liability — Occurrence
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 19.1133 19.1133 80.8867 66.7947 82.5780
2004 36.4434 17.3301 63.5566 52.5339 82.6568
2005 52.1648 15.7215 47.8352 39.1720 81.8895
2006 63.2383 11.0734 36.7617 29.8749 81.2663
2007 72.0780 8.8397 27.9220 22.3797 80.1505
2008 75.9021 3.8241 24.0979 19.6355 81.4821
2009 82.9305 7.0284 17.0695 13.4590 78.8484
2010 85.1441 2.2136 14.8559 11.8972 80.0837
2011 89.3006 4.1565 10.6994 8.2595 77.1961
2012 89.9898 0.6892 10.0102 7.9877 79.7952
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   0.6892 9.3210 7.7015 82.6250
2014   0.6892 8.6318 7.4002 85.7320
2015   0.6892 7.9426 7.0830 89.1783
2016   0.6892 7.2533 6.7492 93.0492
2017 and later years 0.6892 6.5641 6.3977 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 87.9049 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Private Passenger Auto Liability/Medical
Tax Year Estimated CumulativeLosses Paid(%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) DiscountedUnpaid Losses at Year End (%) Discount Factors (%)
 
2003 43.1926 43.1926 56.8074 52.5668 92.5350
2004 72.2008 29.0082 27.7992 25.5743 91.9963
2005 84.5632 12.3625 15.4368 14.2380 92.2343
2006 91.9316 7.3684 8.0684 7.4283 92.0667
2007 95.8729 3.9413 4.1271 3.7760 91.4919
2008 97.7804 1.9075 2.2196 2.0178 90.9099
2009 98.7957 1.0153 1.2043 1.0825 89.8838
2010 99.2491 0.4535 0.7509 0.6743 89.8010
2011 99.5195 0.2703 0.4805 0.4325 89.9950
2012 99.6353 0.1159 0.3647 0.3364 92.2395
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
           
2013   0.1159 0.2488 0.2352 94.5391
2014   0.1159 0.1330 0.1287 96.8375
2015 and later years 0.1159 0.0171 0.0167 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 95.5509 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Products Liability — Claims-Made
Tax Year EstimatedCumulativeLossesPaid(%) EstimatedLosses PaidEach Year(%) UnpaidLosses atYear End(%) DiscountedUnpaidLosses atYear End(%) DiscountFactors(%)
 
2003 6.5804 6.5804 93.4196 76.7759 82.1839
2004 26.7183 20.1379 73.2817 60.1603 82.0945
2005 43.1834 16.4652 56.8166 46.4373 81.7320
2006 43.9209 0.7375 56.0791 48.1279 85.8214
2007 54.3806 10.4597 45.6194 39.9324 87.5339
2008 78.3630 23.9824 21.6370 17.4307 80.5596
2009 82.8643 4.5013 17.1357 13.7309 80.1303
2010 68.2184 -14.6459 31.7816 29.4814 92.7624
2011 79.1582 10.9399 20.8418 19.8107 95.0526
2012 89.6963 10.5381 10.3037 10.0424 97.4648
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013 and later years       97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 92.4655 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Products Liability — Occurrence
Tax Year EstimatedCumulativeLossesPaid(%) EstimatedLosses PaidEach Year(%) UnpaidLosses atYear End(%) DiscountedUnpaidLosses atYear End(%) DiscountFactors(%)
 
2003 9.4198 9.4198 90.5802 72.9877 80.5780
2004 20.5845 11.1647 79.4155 65.3791 82.3253
2005 36.7807 16.1962 63.2193 52.2071 82.5809
2006 55.5974 18.8167 44.4026 35.6522 80.2930
2007 66.6238 11.0263 33.3762 26.2179 78.5526
2008 77.2636 10.6399 22.7364 16.6829 73.3756
2009 79.1888 1.9251 20.8112 15.5869 74.8967
2010 83.6816 4.4928 16.3184 11.7987 72.3029
2011 85.5507 1.8691 14.4493 10.5027 72.6868
2012 85.7291 0.1784 14.2709 10.8732 76.1914
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   0.1784 14.0925 11.2632 79.9231
2014   0.1784 13.9141 11.6737 83.8983
2015   0.1784 13.7357 12.1059 88.1343
2016   0.1784 13.5573 12.5608 92.6497
2017 and later years 0.1784 13.3789 13.0397 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 85.1270 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Reinsurance A (Nonproportional Assumed Property)
Tax Year EstimatedCumulativeLossesPaid(%) EstimatedLosses PaidEach Year(%) UnpaidLosses atYear End(%) DiscountedUnpaidLosses atYear End(%) DiscountFactors(%)
 
2003 25.0571 25.0571 74.9429 67.9998 90.7355
2004 52.0402 26.9831 47.9598 43.8985 91.5317
2005 82.4709 30.4307 17.5291 14.9896 85.5127
2006 85.6387 3.1678 14.3613 12.5293 87.2439
2007 92.7228 7.0840 7.2772 5.9213 81.3678
2008 91.8604 -0.8624 8.1396 7.1182 87.4513
2009 96.5016 4.6412 3.4984 2.7314 78.0753
2010 96.1872 -0.3143 3.8128 3.1979 83.8727
2011 97.6206 1.4333 2.3794 1.8958 79.6738
2012 97.8419 0.2214 2.1581 1.7686 81.9516
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   0.2214 1.9367 1.6347 84.4040
2014   0.2214 1.7154 1.4937 87.0779
2015   0.2214 1.4940 1.3453 90.0469
2016   0.2214 1.2727 1.1891 93.4342
2017 and later years 0.2214 1.0513 1.0247 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 88.6413 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Reinsurance B (Nonproportional Assumed Liability)
Tax Year EstimatedCumulativeLossesPaid(%) EstimatedLosses PaidEach Year(%) UnpaidLosses atYear End(%) DiscountedUnpaidLosses atYear End(%) DiscountFactors(%)
 
2003 8.9223 8.9223 91.0777 72.6945 79.8159
2004 27.3618 18.4395 72.6382 57.6064 79.3058
2005 44.5758 17.2140 55.4242 42.9804 77.5481
2006 53.8781 9.3023 46.1219 35.7012 77.4062
2007 60.8896 7.0115 39.1104 30.3888 77.7000
2008 69.7327 8.8430 30.2673 22.9172 75.7159
2009 76.6292 6.8965 23.3708 17.0490 72.9500
2010 79.4030 2.7738 20.5970 15.1015 73.3191
2011 83.8936 4.4906 16.1064 11.2899 70.0961
2012 80.1707 -3.7229 19.8293 15.7046 79.1993
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   1.1805 18.6487 15.3210 82.1560
2014   1.1805 17.4682 14.9172 85.3965
2015   1.1805 16.2877 14.4921 88.9761
2016   1.1805 15.1072 14.0446 92.9668
2017 and later years 1.1805 13.9266 13.5736 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 88.0916 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Reinsurance C (Nonproportional Assumed Financial Lines)
Tax Year EstimatedCumulativeLossesPaid(%) EstimatedLosses PaidEach Year(%) UnpaidLosses atYear End(%) DiscountedUnpaidLosses atYear End(%) DiscountFactors(%)
 
2003 17.1195 17.1195 82.8805 72.3532 87.2983
2004 46.6590 29.5395 53.3410 45.8584 85.9721
2005 67.7135 21.0545 32.2865 26.6730 82.6134
2006 78.1379 10.4244 21.8621 17.3830 79.5123
2007 89.7346 11.5967 10.2654 6.4008 62.3531
2008 92.1268 2.3921 7.8732 4.2837 54.4090
2009 89.7323 -2.3945 10.2677 6.9663 67.8462
2010 90.0460 0.3137 9.9540 7.0115 70.4390
2011 94.8867 4.8407 5.1133 2.4144 47.2179
2012 86.7041 -8.1827 13.2959 10.9371 82.2591
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   1.4277 11.8683 10.0487 84.6686
2014   1.4277 10.4406 9.1134 87.2886
2015   1.4277 9.0129 8.1289 90.1918
2016   1.4277 7.5852 7.0924 93.5039
2017 and later years 1.4277 6.1575 6.0014 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 85.4523 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.
Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Glass, Burglary and Theft)
Tax Year EstimatedCumulativeLossesPaid(%) EstimatedLosses PaidEach Year(%) UnpaidLosses atYear End(%) DiscountedUnpaidLosses atYear End(%) DiscountFactors(%)
 
2003 62.9320 62.9320 37.0680 35.3003 95.2311
2004 88.4950 25.5631 11.5050 10.9326 95.0251
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2005 and later years 5.7525 5.7525 5.6067 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 97.4648 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2005 tax year.
Workers' Compensation
Tax Year EstimatedCumulativeLossesPaid(%) EstimatedLosses PaidEach Year(%) UnpaidLosses atYear End(%) DiscountedUnpaidLosses atYear End(%) DiscountFactors(%)
 
2003 28.2489 28.2489 71.7511 62.2360 86.7389
2004 57.8739 29.6249 42.1261 35.1204 83.3695
2005 71.2999 13.4260 28.7001 23.1959 80.8218
2006 77.7584 6.4585 22.2416 17.7919 79.9937
2007 81.9301 4.1717 18.0699 14.4493 79.9633
2008 83.7739 1.8437 16.2261 13.3191 82.0839
2009 86.5350 2.7611 13.4650 11.1880 83.0895
2010 88.4367 1.9017 11.5633 9.8265 84.9796
2011 89.5926 1.1559 10.4074 9.1583 87.9982
2012 91.6441 2.0515 8.3559 7.5361 90.1891
           
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2003 accident year and that are outstanding at the end of the tax year shown.
           
2013   2.0515 6.3045 5.8285 92.4498
2014   2.0515 4.2530 4.0308 94.7754
2015   2.0515 2.2016 2.1384 97.1321
2016 and later years 2.0515 0.1501 0.1463 97.4648
           
Taxpayers that use the composite method of Notice 88-100 should use 92.1260 percent to discount unpaid losses that are incurred in this line of business in 2003 and prior years and that are outstanding at the end of the 2013 tax year.

DRAFTING INFORMATION

The principal author of this revenue procedure is Katherine A. Hossofsky of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Hossofsky at (202) 622-8435 (not a toll-free call).


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