Internal Revenue Bulletin:  2008-49 

December 8, 2008 

Rev. Proc. 2008-70


SECTION 1. PURPOSE

This revenue procedure prescribes the loss payment patterns and discount factors for the 2008 accident year. These factors will be used for computing discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2008-10, 2008-3 I.R.B. 290, for background concerning the loss payment patterns and application of the discount factors. This revenue procedure also corrects the discount factors for the Composite and International (Composite) lines of business for the 2006 and 2007 accident years in Rev. Proc. 2007-9, 2007-3 I.R.B. 278, and Rev. Proc. 2008-10, 2008-3 I.R.B. 290, for taxpayers that use the composite method of Notice 88-100, 1988-2 C.B. 439.

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. CORRECTION OF REV. PROC. 2007-9 AND REV. PROC. 2008-10

.01 Rev. Proc. 2007-9, 2007-3 I.R.B. 278, prescribes the loss payment patterns and discount factors for the 2006 accident year. Rev. Proc. 2008-10, 2008-3 I.R.B. 290, prescribes the loss payment patterns and discount factors for the 2007 accident year. An error has been discovered in the composite discount factors for the 2006 and 2007 accident years that were determined for the Composite and International (Composite) lines of business for taxpayers that use the composite method of Notice 88-100, which is used for computing discounted unpaid losses for accident years not separately reported on the annual statement.

.02 Rev. Proc. 2007-9 as corrected for the Composite line of business provides: “Taxpayers that use the composite method of Notice 88-100 should use 90.1284 percent to discount unpaid losses incurred in this line of business in 2006 and prior years that are outstanding at the end of the 2016 taxable year.”

.03 Rev. Proc. 2007-9 as corrected for the International (Composite) line of business provides: “Taxpayers that use the composite method of Notice 88-100 should use 90.1284 percent to discount unpaid losses incurred in this line of business in 2006 and prior years that are outstanding at the end of the 2016 taxable year.”

.04 Rev. Proc. 2008-10 as corrected for the Composite line of business provides: “Taxpayers that use the composite method of Notice 88-100 should use 92.4923 percent to discount unpaid losses incurred in this line of business in 2007 and prior years that are outstanding at the end of the 2017 taxable year.”

.05 Rev. Proc. 2008-10 as corrected for the International (Composite) line of business provides: “Taxpayers that use the composite method of Notice 88-100 should use 92.4923 percent to discount unpaid losses incurred in this line of business in 2007 and prior years that are outstanding at the end of the 2017 taxable year.”

SECTION 4. TABLES OF DISCOUNT FACTORS

.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2008. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2008, which is 4.06 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 2005 annual statement. See Rev. Proc. 2008-10, 2008-3 I.R.B. 290, 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. 980.

.04 Tables.

Tables of Factors to be Used to Discount Unpaid Losses Incurred in Accident Year 2008
 
(Interest rate: 4.06 percent)
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 98.0298 percent to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the 2008 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2008 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 (%)
2008 89.4096 89.4096 10.5904 10.3639 97.8613
2009 99.6848 10.2752 0.3152 0.3030 96.1174
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 2008 accident year and that are outstanding at the end of the tax year shown.
2010 and later years 0.1576 0.1576 0.1545 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 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 (%)
2008 23.6718 23.6718 76.3282 70.1942 91.9637
2009 47.5425 23.8708 52.4575 48.6936 92.8249
2010 66.6847 19.1421 33.3153 31.1437 93.4816
2011 81.5105 14.8258 18.4895 17.2843 93.4819
2012 90.0548 8.5443 9.9452 9.2701 93.2115
2013 94.7311 4.6763 5.2689 4.8762 92.5459
2014 97.0602 2.3292 2.9398 2.6982 91.7820
2015 98.1174 1.0572 1.8826 1.7293 91.8572
2016 98.8692 0.7518 1.1308 1.0326 91.3161
2017 99.1160 0.2467 0.8840 0.8228 93.0737
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   0.2467 0.6373 0.6045 94.8560
2019   0.2467 0.3906 0.3774 96.6210
2020 and later years 0.2467 0.1439 0.1410 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 95.5540 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 34.7004 34.7004 65.2996 59.2808 90.7829
2009 58.6076 23.9072 41.3924 37.2999 90.1131
2010 71.7608 13.1532 28.2392 25.3968 89.9346
2011 81.4987 9.7379 18.5013 16.4943 89.1521
2012 87.8488 6.3501 12.1512 10.6863 87.9440
2013 91.4226 3.5739 8.5774 7.4744 87.1415
2014 93.4057 1.9831 6.5943 5.7549 87.2720
2015 94.2280 0.8222 5.7720 5.1498 89.2206
2016 95.4875 1.2595 4.5125 4.0741 90.2843
2017 96.3560 0.8685 3.6440 3.3535 92.0287
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   0.8685 2.7754 2.6036 93.8109
2019   0.8685 1.9069 1.8233 95.6199
2020   0.8685 1.0383 1.0114 97.4044
2021 and later years 0.8685 0.1698 0.1664 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 94.3096 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 25.2328 25.2328 74.7672 71.0916 95.0839
2009 61.1025 35.8698 38.8975 37.3872 96.1174
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 2008 accident year and that are outstanding at the end of the tax year shown.
2010 and later years 19.4487 19.4487 19.0655 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 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 (%)
2008 7.7824 7.7824 92.2176 88.2568 95.7050
2009 62.1390 54.3565 37.8610 36.3911 96.1174
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 2008 accident year and that are outstanding at the end of the tax year shown.
2010 and later years 18.9305 18.9305 18.5575 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 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 (%)
2008 34.7004 34.7004 65.2996 59.2808 90.7829
2009 58.6076 23.9072 41.3924 37.2999 90.1131
2010 71.7608 13.1532 28.2392 25.3968 89.9346
2011 81.4987 9.7379 18.5013 16.4943 89.1521
2012 87.8488 6.3501 12.1512 10.6863 87.9440
2013 91.4226 3.5739 8.5774 7.4744 87.1415
2014 93.4057 1.9831 6.5943 5.7549 87.2720
2015 94.2280 0.8222 5.7720 5.1498 89.2206
2016 95.4875 1.2595 4.5125 4.0741 90.2843
2017 96.3560 0.8685 3.6440 3.3535 92.0287
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   0.8685 2.7754 2.6036 93.8109
2019   0.8685 1.9069 1.8233 95.6199
2020   0.8685 1.0383 1.0114 97.4044
2021 and later years 0.8685 0.1698 0.1664 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 94.3096 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 4.9425 4.9425 95.0575 85.0276 89.4485
2009 19.9369 14.9944 80.0631 73.1839 91.4078
2010 44.3489 24.4120 55.6511 51.2525 92.0962
2011 64.8374 20.4885 35.1626 32.4331 92.2375
2012 80.2530 15.4156 19.7470 18.0245 91.2770
2013 85.7907 5.5377 14.2093 13.1072 92.2442
2014 91.2722 5.4815 8.7278 8.0478 92.2082
2015 93.3314 2.0593 6.6686 6.2739 94.0812
2016 96.1257 2.7942 3.8743 3.6782 94.9374
2017 97.6538 1.5281 2.3462 2.2687 96.6961
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018 and later years 1.5281 0.8182 0.8021 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 98.0440 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 1.5878 1.5878 98.4122 82.1817 83.5076
2009 4.4720 2.8842 95.5280 82.5760 86.4417
2010 17.7738 13.3018 82.2262 72.3595 88.0005
2011 35.8814 18.1076 64.1186 56.8257 88.6260
2012 52.9447 17.0633 47.0553 41.7266 88.6757
2013 68.4348 15.4901 31.5652 27.6193 87.4993
2014 79.5616 11.1268 20.4384 17.3902 85.0861
2015 85.8198 6.2582 14.1802 11.7123 82.5961
2016 90.1267 4.3069 9.8733 7.7943 78.9437
2017 90.3701 0.2434 9.6299 7.8625 81.6469
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   0.2434 9.3865 7.9335 84.5197
2019   0.2434 9.1431 8.0073 87.5770
2020   0.2434 8.8998 8.0841 90.8352
2021   0.2434 8.6564 8.1641 94.3126
2022 and later years 0.2434 8.4130 8.2473 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 86.1528 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 72.9064 72.9064 27.0936 26.1964 96.6888
2009 93.5836 20.6771 6.4164 6.1673 96.1174
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 2008 accident year and that are outstanding at the end of the tax year shown.
2010 and later years 3.2082 3.2082 3.1450 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 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 (%)
2008 52.5880 52.5880 47.4120 44.2537 93.3385
2009 80.0449 27.4570 19.9551 18.0416 90.4110
2010 86.1625 6.1175 13.8375 12.5336 90.5767
2011 90.7452 4.5827 9.2548 8.3676 90.4137
2012 93.9006 3.1555 6.0994 5.4885 89.9844
2013 95.7613 1.8607 4.2387 3.8132 89.9627
2014 96.8755 1.1141 3.1245 2.8315 90.6219
2015 97.6715 0.7960 2.3285 2.1345 91.6659
2016 98.0329 0.3615 1.9671 1.8524 94.1706
2017 98.6810 0.6481 1.3190 1.2665 96.0207
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   0.6481 0.6709 0.6568 97.8997
2019 and later years 0.6481 0.0228 0.0224 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 97.9053 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 67.9528 67.9528 32.0472 30.8190 96.1676
2009 89.4609 21.5081 10.5391 10.1299 96.1174
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 2008 accident year and that are outstanding at the end of the tax year shown.
2010 and later years 5.2695 5.2695 5.1657 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 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 (%)
2008 5.8796 5.8796 94.1204 83.2369 88.4367
2009 18.8735 12.9938 81.1265 73.3613 90.4283
2010 41.6840 22.8105 58.3160 53.0709 91.0056
2011 62.5322 20.8483 37.4678 33.9583 90.6333
2012 73.5207 10.9885 26.4793 24.1277 91.1189
2013 82.0036 8.4829 17.9964 16.4539 91.4286
2014 88.6279 6.6244 11.3721 10.3644 91.1391
2015 90.7107 2.0828 9.2893 8.6605 93.2317
2016 94.8439 4.1332 5.1561 4.7959 93.0145
2017 96.2689 1.4249 3.7311 3.5370 94.7977
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   1.4249 2.3062 2.2270 96.5683
2019 and later years 1.4249 0.8812 0.8639 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 97.0645 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 13.6594 13.6594 86.3406 74.5578 86.3531
2009 24.8389 11.1795 75.1611 66.1806 88.0517
2010 41.7792 16.9403 58.2208 51.5868 88.6055
2011 58.4995 16.7203 41.5005 36.6249 88.2518
2012 69.5197 11.0203 30.4803 26.8702 88.1560
2013 77.7513 8.2316 22.2487 19.5641 87.9336
2014 84.2243 6.4730 15.7757 13.7553 87.1929
2015 83.2275 -0.9968 16.7725 15.3306 91.4032
2016 88.8524 5.6249 11.1476 10.2151 91.6347
2017 91.3852 2.5328 8.6148 8.0461 93.3986
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   2.5328 6.0820 5.7891 95.1836
2019   2.5328 3.5492 3.4404 96.9345
2020 and later years 2.5328 1.0164 0.9964 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 94.7637 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 42.6108 42.6108 57.3892 54.0511 94.1835
2009 71.5827 28.9719 28.4173 26.6915 93.9269
2010 84.6947 13.1120 15.3053 14.3997 94.0826
2011 92.3556 7.6610 7.6444 7.1693 93.7860
2012 96.2369 3.8812 3.7631 3.5012 93.0391
2013 97.9275 1.6907 2.0725 1.9187 92.5799
2014 98.7719 0.8444 1.2281 1.1352 92.4394
2015 99.2692 0.4973 0.7308 0.6740 92.2334
2016 99.5053 0.2361 0.4947 0.4606 93.0998
2017 99.6440 0.1387 0.3560 0.3378 94.8818
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   0.1387 0.2174 0.2101 96.6446
2019 and later years 0.1387 0.0787 0.0772 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 97.0811 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 1.0259 1.0259 98.9741 84.7900 84.6586
2009 11.7927 10.7667 88.2073 76.2088 86.3973
2010 29.3642 17.5716 70.6358 61.3781 86.8939
2011 55.1655 25.8012 44.8345 37.5503 83.7531
2012 83.4171 28.2516 16.5829 10.2554 61.8434
2013 64.8933 -18.5238 35.1067 29.5679 84.2229
2014 82.3346 17.4414 17.6654 12.9765 73.4571
2015 86.3986 4.0640 13.6014 9.3576 68.7991
2016 76.3310 -10.0676 23.6690 20.0075 84.5305
2017 78.7910 2.4600 21.2090 18.3104 86.3331
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   2.4600 18.7490 16.5444 88.2412
2019   2.4600 16.2890 14.7066 90.2855
2020   2.4600 13.8290 12.7943 92.5176
2021   2.4600 11.3691 10.8043 95.0326
2022 and later years 2.4600 8.9091 8.7336 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 89.2840 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 5.0466 5.0466 94.9534 80.1653 84.4260
2009 13.6935 8.6469 86.3065 74.5994 86.4354
2010 28.2541 14.5606 71.7459 62.7748 87.4961
2011 41.3083 13.0542 58.6917 52.0070 88.6104
2012 59.3693 18.0610 40.6307 35.6944 87.8509
2013 73.0717 13.7024 26.9283 23.1659 86.0279
2014 74.6612 1.5895 25.3388 22.4849 88.7371
2015 78.9833 4.3221 21.0167 18.9889 90.3513
2016 86.1231 7.1398 13.8769 12.4765 89.9085
2017 88.6931 2.5700 11.3069 10.3614 91.6379
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   2.5700 8.7369 8.1604 93.4018
2019   2.5700 6.1669 5.8701 95.1869
2020   2.5700 3.5969 3.4868 96.9378
2021 and later years 2.5700 1.0269 1.0067 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 94.0919 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year.
Reinsurance — Nonproportional Assumed Property
Tax Year Estimated Cumulative Losses Paid (%) Estimated Losses Paid Each Year (%) Unpaid Losses at Year End (%) Discounted Unpaid Losses at Year End (%) Discount Factors (%)
2008 12.9458 12.9458 87.0542 80.8403 92.8620
2009 60.1796 47.2338 39.8204 35.9393 90.2535
2010 80.8225 20.6429 19.1775 16.3406 85.2075
2011 84.9430 4.1205 15.0570 12.8008 85.0155
2012 85.6680 0.7250 14.3320 12.5809 87.7821
2013 80.0452 -5.6229 19.9548 18.8276 94.3509
2014 86.7013 6.6561 13.2987 12.8020 96.2654
2015 97.2533 10.5520 2.7467 2.5578 93.1205
2016 97.6721 0.4188 2.3279 2.2344 95.9820
2017 98.8078 1.1357 1.1922 1.1665 97.8487
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018 and later years 1.1357 0.0564 0.0553 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 94.5477 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 32.5917 32.5917 67.4083 54.5146 80.8723
2009 33.3995 0.8078 66.6005 55.9039 83.9392
2010 35.4948 2.0953 64.5052 56.0362 86.8708
2011 44.0321 8.5373 55.9679 49.6024 88.6265
2012 64.8299 20.7979 35.1701 30.4004 86.4383
2013 66.4358 1.6059 33.5642 29.9965 89.3706
2014 77.8097 11.3738 22.1903 19.6119 88.3805
2015 82.4438 4.6341 17.5562 15.6809 89.3183
2016 84.1944 1.7507 15.8056 14.5317 91.9406
2017 87.9223 3.7279 12.0777 11.3189 93.7176
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   3.7279 8.3498 7.9757 95.5191
2019   3.7279 4.6219 4.4967 97.2900
2020 and later years 3.7279 0.8940 0.8764 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 94.6662 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 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 (%)
2008 8.4783 8.4783 91.5217 82.6377 90.2930
2009 28.0475 19.5693 71.9525 66.0302 91.7692
2010 60.4351 32.3875 39.5649 35.6726 90.1622
2011 82.4448 22.0097 17.5552 14.6688 83.5583
2012 90.2720 7.8271 9.7280 7.2799 74.8343
2013 85.3168 -4.9551 14.6831 12.6301 86.0181
2014 88.3777 3.0608 11.6223 10.0206 86.2186
2015 89.9934 1.6157 10.0066 8.7793 87.7346
2016 81.6664 -8.3269 18.3336 17.6300 96.1625
2017 91.0491 9.3827 8.9509 8.7745 98.0298
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018 and later years 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 94.5352 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year.
Special Property (Fire, Allied Lines, Inland Marine, Earthquake, 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 (%)
2008 44.5756 44.5756 55.4244 53.5639 96.6430
2009 88.4263 41.8507 13.5737 13.0467 96.1174
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 2008 accident year and that are outstanding at the end of the tax year shown.
2010 and later years 6.7869 6.7869 6.6531 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 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 (%)
2008 19.0410 19.0410 80.9590 69.6415 86.0207
2009 40.2442 21.2032 59.7558 50.8396 85.0789
2010 57.1497 16.9055 42.8503 35.6584 83.2162
2011 67.8601 10.7104 32.1399 26.1804 81.4579
2012 75.5399 7.6797 24.4601 19.4093 79.3507
2013 80.1157 4.5758 19.8843 15.5296 78.0994
2014 82.1828 2.0672 17.8172 14.0513 78.8640
2015 84.4045 2.2217 15.5955 12.3555 79.2248
2016 85.5195 1.1150 14.4805 11.7198 80.9346
2017 86.2855 0.7661 13.7145 11.4141 83.2269
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 2008 accident year and that are outstanding at the end of the tax year shown.
2018   0.7661 12.9484 11.0961 85.6945
2019   0.7661 12.1823 10.7651 88.3666
2020   0.7661 11.4163 10.4207 91.2795
2021   0.7661 10.6502 10.0624 94.4802
2022 and later years 0.7661 9.8842 9.6894 98.0298
Taxpayers that use the composite method of Notice 88-100 should use 88.0210 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year.

SECTION 5. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2007-9 and Rev. Proc. 2008-10 are modified as to the composite discount factor to be used by taxpayers that use the composite method of Notice 88-100 under the Composite and International (Composite) lines of business.

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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