Internal Revenue Bulletin:  2008-3 

January 22, 2008 

Rev. Proc. 2008-10


SECTION 1. PURPOSE

This revenue procedure prescribes the loss payment patterns and discount factors for the 2007 determination year. These factors will be used to compute discounted unpaid losses under § 846 of the Internal Revenue Code.

SEC. 2. BACKGROUND

.01 Section 846 provides that discounted unpaid losses must be separately determined for each accident year of each line of business by applying an interest rate determined under § 846(c) and the appropriate loss payment pattern to the amount of unpaid losses as measured at the end of the tax year.

Section 846(d) directs the Secretary to use the most recent aggregate loss payment data of property and casualty insurance companies to determine and publish a loss payment pattern for each line of business every five years. This payment pattern is used to discount unpaid losses for the accident year ending with a determination year and for each of the four succeeding accident years.

Section 846(e) allows a taxpayer to make an election in each determination year to use its own historical payment pattern instead of the Secretary’s tables. This election does not apply to any international insurance or reinsurance line of business.

Section 846(f)(4) defines the term “line of business” as a category for the reporting of loss payment patterns on the annual statement for fire and casualty companies approved by the National Association of Insurance Commissioners (NAIC), except that the multiple peril lines shall be treated as a single line of business. Section 846(f)(5) states that the term “multiple peril lines” means the lines of business relating to farmowners multiple peril, homeowners multiple peril, commercial multiple peril, ocean marine, aircraft (all perils) and boiler and machinery.

.02 Pursuant to § 846(d), the Secretary has determined a loss payment pattern for each property and casualty line of business for the 2007 determination year that, pursuant to § 846(d)(1), must be applied through the 2011 accident year.

.03 The loss payment patterns for the 2007 determination year are based on the aggregate loss payment information reported on the 2005 annual statements of property and casualty insurance companies and compiled by A.M. Best and Co. The tables are arranged in alphabetical order. Following is an additional explanation of some of the tables and changes to the tables.

(1) Lines of Business. The lines of business for the 2007 determination year are the same as the lines of business for the 2002 determination year. See Rev. Proc. 2003-17, 2003-1 C.B. 427

(2) Format of the Tables. To simplify the tables, the columns entitled Tax Year provide the actual tax years, rather than AY+0, AY+1, and so on.

(3) Accident Years Not Separately Reported on the NAIC Annual Statement. 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. 980.

(4) Smoothing Data. In Rev. Proc. 2003-17, section 2.03(4), comments were requested as to whether a methodology should be adopted to smooth the raw payment data and thus produce a more stable pattern of discount factors. This revenue procedure does not adopt such a methodology with respect to the 2007 determination year.

SEC. 3. SCOPE

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

SEC. 4. TABLES OF DISCOUNT FACTORS

.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2007. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2007, 3.97 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 unpaid losses on the resulting line of business in accordance with the discounting patterns that would have applied to those unpaid losses based on their classification on the 2007 annual statement.

.03 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 98.0722 percent to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the 2007 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2007 taxable year.
Auto Physical Damage
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 89.4096 89.4096 10.5904 10.3687 97.9072
2008 99.6848 10.2752 0.3152 0.3032 96.1998
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2009 and later years 0.1576 0.1576 0.1546 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.
Commercial Auto/Truck Liability/Medical
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 23.6718 23.6718 76.3282 70.3185 92.1265
2008 47.5425 23.8708 52.4575 48.7701 92.9709
2009 66.6847 19.1421 33.3153 31.1879 93.6143
2010 81.5105 14.8258 18.4895 17.3088 93.6143
2011 90.0548 8.5443 9.9452 9.2837 93.3488
2012 94.7311 4.6763 5.2689 4.8841 92.6963
2013 97.0602 2.3292 2.9398 2.7031 91.9480
2014 98.1174 1.0572 1.8826 1.7324 92.0225
2015 98.8692 0.7518 1.1308 1.0346 91.4939
2016 99.1160 0.2467 0.8840 0.8241 93.2174
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2006 accident year and that are outstanding at the end of the tax year shown.
2017   0.2467 0.6373 0.6052 94.9641
2018   0.2467 0.3906 0.3777 96.6929
2019 and later years 0.2467 0.1439 0.1411 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 95.5650 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Composite
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 34.7004 34.7004 65.2996 59.3989 90.9638
2008 58.6076 23.9072 41.3924 37.3799 90.3063
2009 71.7608 13.1532 28.2392 25.4522 90.1307
2010 81.4987 9.7379 18.5013 16.5333 89.3631
2011 87.8488 6.3501 12.1512 10.7148 88.1789
2012 91.4226 3.5739 8.5774 7.4961 87.3938
2013 93.4057 1.9831 6.5943 5.7716 87.5245
2014 94.2280 0.8222 5.7720 5.1623 89.4370
2015 95.4875 1.2595 4.5125 4.0830 90.4817
2016 96.3560 0.8685 3.6440 3.3595 92.1928
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2006 accident year and that are outstanding at the end of the tax year shown.
2017   0.8685 2.7754 2.6072 93.9399
2018   0.8685 1.9069 1.8251 95.7124
2019   0.8685 1.0383 1.0120 97.4599
2020 and later years 0.8685 0.1698 0.1665 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 91.0440 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Fidelity/Surety
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 25.2328 25.2328 74.7672 71.1687 95.1871
2008 61.1025 35.8698 38.8975 37.4193 96.1998
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2009 and later years 19.4487 19.4487 19.0738 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.
Financial Guaranty/Mortgage Guaranty
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 7.7824 7.7824 92.2175 88.3402 95.7954
2008 62.1390 54.3565 37.8610 36.4222 96.1998
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2009 and later years 18.9305 18.9305 18.5656 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.
International (Composite)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 34.7004 34.7004 65.2996 59.3989 90.9638
2008 58.6076 23.9072 41.3924 37.3799 90.3063
2009 71.7608 13.1532 28.2392 25.4522 90.1307
2010 81.4987 9.7379 18.5013 16.5333 89.3631
2011 87.8488 6.3501 12.1512 10.7148 88.1789
2012 91.4226 3.5739 8.5774 7.4961 87.3938
2013 93.4057 1.9831 6.5943 5.7716 87.5245
2014 94.2280 0.8222 5.7720 5.1623 89.4370
2015 95.4875 1.2595 4.5125 4.0830 90.4817
2016 96.3560 0.8685 3.6440 3.3595 92.1928
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   0.8685 2.7754 2.6072 93.9399
2018   0.8685 1.9069 1.8251 95.7124
2019   0.8685 1.0383 1.0120 97.4599
2020 and later years 0.8685 0.1698 0.1665 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 91.0440 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Medical Malpractice — Claims-Made
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 4.9425 4.9425 95.0575 85.2278 89.6591
2008 19.9369 14.9944 80.0631 73.3222 91.5804
2009 44.3489 24.4120 55.6511 51.3411 92.2554
2010 64.8374 20.4885 35.1626 32.4882 92.3941
2011 80.2530 15.4156 19.7470 18.0593 91.4535
2012 85.7907 5.5377 14.2093 13.1297 92.4024
2013 91.2722 5.4815 8.7278 8.0618 92.3685
2014 93.3314 2.0593 6.6686 6.2821 94.2043
2015 96.1257 2.7942 3.8743 3.6823 95.0438
2016 97.6538 1.5281 2.3462 2.2704 96.7663
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017 and later years 1.5281 0.8182 0.8024 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 97.4255 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Medical Malpractice — Occurrence
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 1.5878 1.5878 98.4122 82.4895 83.8204
2008 4.4720 2.8842 95.5280 82.8234 86.7006
2009 17.7738 13.3018 82.2262 72.5482 88.2300
2010 35.8814 18.1076 64.1186 56.9648 88.8429
2011 52.9447 17.0633 47.0553 41.8276 88.8904
2012 68.4348 15.4901 31.5652 27.6936 87.7346
2013 79.5616 11.1268 20.4384 17.4475 85.3663
2014 85.8198 6.2582 14.1802 11.7590 82.9253
2015 90.1267 4.3069 9.8733 7.8342 79.3476
2016 90.3701 0.2434 9.6299 7.8971 82.0057
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   0.2434 9.3865 7.9624 84.8282
2018   0.2434 9.1431 8.0304 87.8294
2019   0.2434 8.8998 8.1010 91.0250
2020   0.2434 8.6564 8.1745 94.4327
2021 and later years 0.2434 8.4130 8.2508 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 84.8282 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Miscellaneous Casualty
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 72.9064 72.9064 27.0936 26.2154 96.7589
2008 93.5836 20.6771 6.4164 6.1726 96.1998
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2009 and later years 3.2082 3.2082 3.1464 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable 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 (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 52.5880 52.5880 47.4120 44.3168 93.4716
2008 80.0449 27.4570 19.9551 18.0795 90.6009
2009 86.1625 6.1175 13.8375 12.5595 90.7636
2010 90.7452 4.5827 9.2548 8.3853 90.6043
2011 93.9006 3.1555 6.0994 5.5007 90.1844
2012 95.7613 1.8607 4.2387 3.8218 90.1647
2013 96.8755 1.1141 3.1245 2.8375 90.8127
2014 97.6715 0.7960 2.3285 2.1385 91.8377
2015 98.0329 0.3615 1.9671 1.8548 94.2925
2016 98.6810 0.6481 1.3190 1.2676 96.1051
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   0.6481 0.6709 0.6571 97.9448
2018 and later years 0.6481 0.0228 0.0224 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 97.9855 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Other (Including Credit)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 67.9528 67.9528 32.0472 30.8449 96.2484
2008 89.4609 21.5081 10.5391 10.1386 96.1998
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2009 and later years 5.2695 5.2695 5.1680 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.
Other Liability — Claims-Made
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 5.8796 5.8796 94.1204 83.4520 88.6652
2008 18.8735 12.9938 81.1265 73.5158 90.6186
2009 41.6840 22.8105 58.3160 53.1755 91.1850
2010 62.5322 20.8483 37.4678 34.0284 90.8206
2011 73.5207 10.9885 26.4793 24.1749 91.2974
2012 82.0036 8.4829 17.9964 16.4850 91.6017
2013 88.6279 6.6244 11.3721 10.3849 91.3196
2014 90.7107 2.0828 9.2893 8.6735 93.3708
2015 94.8439 4.1332 5.1561 4.8034 93.1593
2016 96.2689 1.4249 3.7311 3.5411 94.9069
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   1.4249 2.3062 2.2287 96.6413
2018 and later years 1.4249 0.8812 0.8642 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 96.1717 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Other Liability — Occurrence
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 13.6594 13.6594 86.3406 74.7852 86.6165
2008 24.8389 11.1795 75.1611 66.3549 88.2836
2009 41.7792 16.9403 58.2208 51.7160 88.8273
2010 58.4995 16.7203 41.5005 36.7201 88.4811
2011 69.5197 11.0203 30.4803 26.9411 88.3885
2012 77.7513 8.2316 22.2487 19.6172 88.1725
2013 84.2243 6.4730 15.7757 13.7958 87.4497
2014 83.2275 -0.9968 16.7725 15.3599 91.5778
2015 88.8524 5.6249 11.1476 10.2342 91.8064
2016 91.3852 2.5328 8.6148 8.0579 93.5358
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   2.5328 6.0820 5.7952 95.2850
2018   2.5328 3.5492 3.4427 96.9998
2019 and later years 2.5328 1.0164 0.9968 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 92.8572 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Private Passenger Auto Liability/Medical
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 42.6108 42.6108 57.3892 54.1196 94.3029
2008 71.5827 28.9719 28.4173 26.7268 94.0513
2009 84.6947 13.1120 15.3053 14.4182 94.2036
2010 92.3556 7.6610 7.6444 7.1790 93.9125
2011 96.2369 3.8812 3.7631 3.5065 93.1803
2012 97.9275 1.6907 2.0725 1.9218 92.7305
2013 98.7719 0.8444 1.2281 1.1371 92.5934
2014 99.2692 0.4973 0.7308 0.6752 92.3927
2015 99.5053 0.2361 0.4947 0.4613 93.2429
2016 99.6440 0.1387 0.3560 0.3382 94.9893
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   0.1387 0.2174 0.2102 96.7159
2018 and later years 0.1387 0.0787 0.0772 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 97.0832 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Products Liability — Claims-Made
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 1.0259 1.0259 98.9741 84.0703 84.9417
2008 11.7927 10.7667 88.2073 76.4295 86.6475
2009 29.3642 17.5716 70.6358 61.5467 87.1325
2010 55.1655 25.8012 44.8345 37.6817 84.0462
2011 83.4171 28.2516 16.5829 10.3708 62.5388
2012 64.8933 -18.5238 35.1067 29.6704 84.5149
2013 82.3346 17.4414 17.6654 13.0641 73.9533
2014 86.3986 4.0640 13.6014 9.4389 69.3965
2015 76.3310 -10.0676 23.6690 20.0791 84.8330
2016 78.7910 2.4600 21.2090 18.3679 86.6043
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   2.4600 18.7490 16.5888 88.4781
2018   2.4600 16.2890 14.7390 90.4843
2019   2.4600 13.8290 12.8158 92.6732
2020   2.4600 11.3691 10.8163 95.1377
2021 and later years 2.4600 8.9091 8.7373 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 88.4781 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Products Liability — Occurrence
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 5.0466 5.0466 94.9534 80.4479 84.7236
2008 13.6935 8.6469 86.3065 74.8249 86.6967
2009 28.2541 14.5606 71.7459 62.9486 87.7383
2010 41.3083 13.0542 58.6917 52.1369 88.8318
2011 59.3693 18.0610 40.6307 35.7907 88.0878
2012 73.0717 13.7024 26.9283 23.2398 86.3026
2013 74.6612 1.5895 25.3388 22.5417 88.9612
2014 78.9833 4.3221 21.0167 19.0296 90.5449
2015 86.1231 7.1398 13.8769 12.5049 90.1129
2016 88.6931 2.5700 11.3069 10.3808 91.8095
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   2.5700 8.7369 8.1724 93.5389
2018   2.5700 6.1669 5.8763 95.2882
2019   2.5700 3.5969 3.4891 97.0031
2020 and later years 2.5700 1.0269 1.0071 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 92.1824 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Reinsurance — Nonproportional Assumed Liability
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 12.9458 12.9458 87.0542 80.9635 93.0035
2008 60.1796 47.2338 39.8204 36.0155 90.4447
2009 80.8225 20.6429 19.1775 16.3966 85.4991
2010 84.9430 4.1205 15.0570 12.8460 85.3161
2011 85.6680 0.7250 14.3320 12.6167 88.0322
2012 80.0452 -5.6229 19.9548 18.8510 94.4685
2013 86.7013 6.6561 13.2987 12.8124 96.3436
2014 97.2533 10.5520 2.7467 2.5617 93.2640
2015 97.6721 0.4188 2.3279 2.2363 96.0671
2016 98.8078 1.1357 1.1922 1.1671 97.8949
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017 and later years 1.1357 0.0564 0.0553 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 92.7876 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Reinsurance — Nonproportional Assumed Liability
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 32.5917 32.5917 67.4083 54.7592 81.2352
2008 33.3995 0.8078 66.6005 56.1095 84.2479
2009 35.4948 2.0953 64.5052 56.2006 87.1256
2010 44.0321 8.5373 55.9679 49.7267 88.8485
2011 64.8299 20.7979 35.1701 30.4941 86.7047
2012 66.4358 1.6059 33.5642 30.0673 89.5814
2013 77.8097 11.3738 22.1903 19.6635 88.6130
2014 82.4438 4.6341 17.5562 15.7190 89.5350
2015 84.1944 1.7507 15.8056 14.5579 92.1064
2016 87.9223 3.7279 12.0777 11.3347 93.8485
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   3.7279 8.3498 7.9835 95.6137
2018   3.7279 4.6219 4.4993 97.3478
2019 and later years 3.7279 0.8940 0.8768 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 92.6803 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Reinsurance — Nonproportional Assumed Financial Lines
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 8.4783 8.4783 91.5217 82.8118 90.4832
2008 28.0475 19.5693 71.9525 66.1455 91.9295
2009 60.4351 32.3875 39.5649 35.7473 90.3510
2010 82.4448 22.0097 17.5552 14.7241 83.8733
2011 90.2720 7.8271 9.7280 7.3277 75.3251
2012 85.3168 -4.9551 14.6831 12.6710 86.2966
2013 88.3777 3.0608 11.6223 10.0531 86.4983
2014 89.9934 1.6157 10.0066 8.8048 87.9894
2015 81.6664 -8.3269 18.3336 17.6449 96.2439
2016 91.0491 9.3827 8.9509 8.7783 98.0722
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017 and later years - - - 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 92.7966 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.
Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Glass, Burglary and Theft)
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 44.5756 44.5756 55.4244 53.6032 96.7140
2008 88.4263 41.8507 13.5737 13.0579 96.1998
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2009 and later years 6.7869 6.7869 6.6560 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.
Workers’ Compensation
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2007 19.0410 19.0410 80.9590 69.8486 86.2765
2008 40.2442 21.2032 59.7558 51.0015 85.3500
2009 57.1497 16.9055 42.8503 35.7885 83.5198
2010 67.8601 10.7104 32.1399 26.2883 81.7936
2011 75.5399 7.6797 24.4601 19.5013 79.7269
2012 80.1157 4.5758 19.8843 15.6098 78.5028
2013 82.1828 2.0672 17.8172 14.1216 79.2587
2014 84.4045 2.2217 15.5955 12.4169 79.6188
2015 85.5195 1.1150 14.4805 11.7730 81.3024
2016 86.2855 0.7661 13.7145 11.4593 83.5562
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the tax year shown.
2017   0.7661 12.9484 11.1331 85.9805
2018   0.7661 12.1823 10.7940 88.6033
2019   0.7661 11.4163 10.4414 91.4603
2020   0.7661 10.6502 10.0748 94.5968
2021 and later years 0.7661 9.8842 9.6936 98.0722
Taxpayers that use the composite method of Notice 88-100 should use 89.5536 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable 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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