Internal Revenue Bulletin:  2010-50 

December 13, 2010 

Rev. Proc. 2010-49


SECTION 1. PURPOSE

This revenue procedure prescribes the loss payment patterns and discount factors for the 2010 accident year. These factors will be used for computing discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2008-10, 2008-1 C.B. 290, 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 2010. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2010, which is 3.81 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, section 2, for additional background on discounting under § 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 2010
 
(Interest rate: 3.81 percent)
Lines of Business
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 98.1478 percent to discount unpaid losses incurred in this line of business in the 2010 accident year and that are outstanding at the end of the 2010 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2010 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 (%)
2010 89.4096 89.4096 10.5904 10.3774 97.9889
2011 99.6848 10.2752 0.3152 0.3037 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 0.1576 0.1576 0.1547 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 23.6718 23.6718 76.3282 70.5406 92.4174
2011 47.5425 23.8708 52.4575 48.9069 93.2316
2012 66.6847 19.1421 33.3153 31.2669 93.8514
2013 81.5105 14.8258 18.4895 17.3526 93.8509
2014 90.0548 8.5443 9.9452 9.3062 93.5944
2015 94.7311 4.6763 5.2689 4.8983 92.9653
2016 97.0602 2.3292 2.9398 2.7118 92.2448
2017 98.1174 1.0572 1.8826 1.7379 92.3179
2018 98.8692 0.7518 1.1308 1.0382 91.8115
2019 99.1160 0.2467 0.8840 0.8263 93.4738
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   0.2467 0.6373 0.6064 95.1568
2021   0.2467 0.3906 0.3782 96.8210
2022 and later years 0.2467 0.1439 0.1412 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 95.9976 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 34.7004 34.7004 65.2996 59.6104 91.2876
2011 58.6076 23.9072 41.3924 37.5232 90.6525
2012 71.7608 13.1532 28.2392 25.5514 90.4822
2013 81.4987 9.7379 18.5013 16.6033 89.7412
2014 87.8488 6.3501 12.1512 10.7660 88.5998
2015 91.4226 3.5739 8.5774 7.5348 87.8456
2016 93.4057 1.9831 6.5943 5.8014 87.9763
2017 94.2280 0.8222 5.7720 5.1847 89.8241
2018 95.4875 1.2595 4.5125 4.0989 90.8346
2019 96.3560 0.8685 3.6440 3.3702 92.4859
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   0.8685 2.7754 2.6136 94.1702
2021   0.8685 1.9069 1.8283 95.8774
2022   0.8685 1.0383 1.0130 97.5588
2023 and later years 0.8685 0.1698 0.1666 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 96.2071 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 25.2328 25.2328 74.7672 71.3063 95.3711
2011 61.1025 35.8698 38.8975 37.4764 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 19.4487 19.4487 19.0885 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 7.7824 7.7824 92.2176 88.4888 95.9565
2011 62.1390 54.3565 37.8610 36.4778 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 18.9305 18.9305 18.5799 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 34.7004 34.7004 65.2996 59.6104 91.2876
2011 58.6076 23.9072 41.3924 37.5232 90.6525
2012 71.7608 13.1532 28.2392 25.5514 90.4822
2013 81.4987 9.7379 18.5013 16.6033 89.7412
2014 87.8488 6.3501 12.1512 10.7660 88.5998
2015 91.4226 3.5739 8.5774 7.5348 87.8456
2016 93.4057 1.9831 6.5943 5.8014 87.9763
2017 94.2280 0.8222 5.7720 5.1847 89.8241
2018 95.4875 1.2595 4.5125 4.0989 90.8346
2019 96.3560 0.8685 3.6440 3.3702 92.4859
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   0.8685 2.7754 2.6136 94.1702
2021   0.8685 1.9069 1.8283 95.8774
2022   0.8685 1.0383 1.0130 97.5588
2023 and later years 0.8685 0.1698 0.1666 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 96.2071 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 4.9425 4.9425 95.0575 85.5860 90.0359
2011 19.9369 14.9944 80.0631 73.5694 91.8892
2012 44.3489 24.4120 55.6511 51.4996 92.5402
2013 64.8374 20.4885 35.1626 32.5867 92.6741
2014 80.2530 15.4156 19.7470 18.1217 91.7692
2015 85.7907 5.5377 14.2093 13.1699 92.6850
2016 91.2722 5.4815 8.7278 8.0867 92.6547
2017 93.3314 2.0593 6.6686 6.2967 94.4240
2018 96.1257 2.7942 3.8743 3.6897 95.2335
2019 97.6538 1.5281 2.3462 2.2733 96.8916
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years 1.5281 0.8182 0.8030 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 1.5878 1.5878 98.4122 83.0418 84.3816
2011 4.4720 2.8842 95.5280 82.2670 87.1650
2012 17.7738 13.3018 82.2262 72.8866 88.6416
2013 35.8814 18.1076 64.1186 57.2143 89.2320
2014 52.9447 17.0633 47.0553 42.0088 89.2755
2015 68.4348 15.4901 31.5652 27.8270 88.1571
2016 79.5616 11.1268 20.4384 17.5503 85.8696
2017 85.8198 6.2582 14.1802 11.8427 83.5160
2018 90.1267 4.3069 9.8733 7.9057 80.0721
2019 90.3701 0.2434 9.6299 7.9590 82.6486
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   0.2434 9.3865 8.0142 85.3803
2021   0.2434 9.1431 8.0716 88.2805
2022   0.2434 8.8998 8.1312 91.3639
2023   0.2434 8.6564 8.1930 94.6469
2024 and later years 0.2434 8.4130 8.2572 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 89.4537 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 72.9064 72.9064 27.0936 26.2493 96.8838
2011 93.5836 20.6771 6.4164 6.1820 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 3.2082 3.2082 3.1488 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 52.5880 52.5880 47.4120 44.4297 93.7097
2011 80.0449 27.4570 19.9551 18.1473 90.9409
2012 86.1625 6.1175 13.8375 12.6057 91.0982
2013 90.7452 4.5827 9.2548 8.4168 90.9453
2014 93.9006 3.1555 6.0994 5.5225 90.5422
2015 95.7613 1.8607 4.2387 3.8371 90.5259
2016 96.8755 1.1141 3.1245 2.8481 91.1536
2017 97.6715 0.7960 2.3285 2.1456 92.1445
2018 98.0329 0.3615 1.9671 1.8591 94.5101
2019 98.6810 0.6481 1.3190 1.2696 96.2555
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   0.6481 0.6709 0.6577 98.0252
2021 and later years 0.6481 0.0228 0.0224 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.0254 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 67.9528 67.9528 32.0472 30.8911 96.3926
2011 89.4609 21.5081 10.5391 10.1541 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 5.2695 5.2695 5.1719 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 5.8796 5.8796 94.1204 83.8370 89.0742
2011 18.8735 12.9938 81.1265 73.7921 90.9593
2012 41.6840 22.8105 58.3160 53.3626 91.5059
2013 62.5322 20.8483 37.4678 34.1540 91.1557
2014 73.5207 10.9885 26.4793 24.2594 91.6166
2015 82.0036 8.4829 17.9964 16.5408 91.9114
2016 88.6279 6.6244 11.3721 10.4216 91.6420
2017 90.7107 2.0828 9.2893 8.6965 93.6193
2018 94.8439 4.1332 5.1561 4.8167 93.4178
2019 96.2689 1.4249 3.7311 3.5484 95.1017
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   1.4249 2.3062 2.2317 96.7713
2021 and later years 1.4249 0.8812 0.8649 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 97.1192 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 13.6594 13.6594 86.3406 75.1929 87.0887
2011 24.8389 11.1795 75.1611 66.6672 88.6992
2012 41.7792 16.9403 58.2208 51.9473 89.2247
2013 58.4995 16.7203 41.5005 36.8907 88.8921
2014 69.5197 11.0203 30.4803 27.0680 88.8049
2015 77.7513 8.2316 22.2487 19.7123 88.6000
2016 84.2243 6.4730 15.7757 13.8682 87.9089
2017 83.2275 -0.9968 16.7725 15.4122 91.8899
2018 88.8524 5.6249 11.1476 10.2684 92.1130
2019 91.3852 2.5328 8.6148 8.0790 93.7807
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   2.5328 6.0820 5.8062 95.4658
2021   2.5328 3.5492 3.4468 97.1162
2022 and later years 2.5328 1.0164 0.9976 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 96.9123 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 42.6108 42.6108 57.3892 54.2420 94.5161
2011 71.5827 28.9719 28.4173 26.7900 94.2735
2012 84.6947 13.1120 15.3053 14.4512 94.4197
2013 92.3556 7.6610 7.6444 7.1963 94.1386
2014 96.2369 3.8812 3.7631 3.5160 93.4328
2015 97.9275 1.6907 2.0725 1.9274 92.9997
2016 98.7719 0.8444 1.2281 1.1405 92.8686
2017 99.2692 0.4973 0.7308 0.6773 92.6773
2018 99.5053 0.2361 0.4947 0.4625 93.4984
2019 99.6440 0.1387 0.3560 0.3389 95.1810
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   0.1387 0.2174 0.2105 96.8431
2021 and later years 0.1387 0.0787 0.0773 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 97.1586 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 1.0259 1.0259 98.9741 84.5737 85.4504
2011 11.7927 10.7667 88.2073 76.8261 87.0971
2012 29.3642 17.5716 70.6358 61.8499 87.5618
2013 55.1655 25.8012 44.8345 37.9183 84.5738
2014 83.4171 28.2516 16.5829 10.5782 63.7897
2015 64.8933 -18.5238 35.1067 29.8546 85.0396
2016 82.3346 17.4414 17.6654 13.2216 74.8445
2017 86.3986 4.0640 13.6014 9.5846 70.4680
2018 76.3310 -10.0676 23.6690 20.2074 85.3750
2019 78.7910 2.4600 21.2090 18.4709 87.0899
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   2.4600 18.7490 16.6682 88.9018
2021   2.4600 16.2890 14.7969 90.8395
2022   2.4600 13.8290 12.8542 92.9509
2023   2.4600 11.3691 10.8376 95.3250
2024 and later years 2.4600 8.9091 8.7441 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 91.2831 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 5.0466 5.0466 94.9534 80.9549 85.2575
2011 13.6935 8.6469 86.3065 75.2292 87.1651
2012 28.2541 14.5606 71.7459 63.2600 88.1723
2013 41.3083 13.0542 58.6917 52.3697 89.2284
2014 59.3693 18.0610 40.6307 35.9631 88.5121
2015 73.0717 13.7024 26.9283 23.3723 86.7946
2016 74.6612 1.5895 25.3388 22.6433 89.3621
2017 78.9833 4.3221 21.0167 19.1024 90.8912
2018 86.1231 7.1398 13.8769 12.5556 90.4784
2019 88.6931 2.5700 11.3069 10.4155 92.1160
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   2.5700 8.7369 8.1938 93.7837
2021   2.5700 6.1669 5.8875 95.4689
2022   2.5700 3.5969 3.4933 97.1193
2023 and later years 2.5700 1.0269 1.0079 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 96.2670 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 12.9458 12.9458 87.0542 81.1839 93.2567
2011 60.1796 47.2338 39.8204 36.1518 90.7872
2012 80.8225 20.6429 19.1775 16.4967 86.0213
2013 84.9430 4.1205 15.0570 12.9270 85.8537
2014 85.6680 0.7250 14.3320 12.6808 88.4791
2015 80.0452 -5.6229 19.9548 18.8929 94.6784
2016 86.7013 6.6561 13.2987 12.8310 96.4830
2017 97.2533 10.5520 2.7467 2.5688 93.5201
2018 97.6721 0.4188 2.3279 2.2399 96.2189
2019 98.8078 1.1357 1.1922 1.1680 97.9772
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years 1.1357 0.0564 0.0554 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.0716 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 32.5917 32.5917 67.4083 55.1981 81.8862
2011 33.3995 0.8078 66.6005 56.4781 84.8014
2012 35.4948 2.0953 64.5052 56.4951 87.5823
2013 44.0321 8.5373 55.9679 49.9492 89.2461
2014 64.8299 20.7979 35.1701 30.6619 87.1818
2015 66.4358 1.6059 33.5642 30.1939 89.9588
2016 77.8097 11.3738 22.1903 19.7558 89.0289
2017 82.4438 4.6341 17.5562 15.7869 89.9222
2018 84.1944 1.7507 15.8056 14.6047 92.4025
2019 87.9223 3.7279 12.0777 11.3629 94.0821
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   3.7279 8.3498 7.9976 95.7823
2021   3.7279 4.6219 4.5041 97.4510
2022 and later years 3.7279 0.8940 0.8775 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 97.2504 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 8.4783 8.4783 91.5217 83.1236 90.8239
2011 28.0475 19.5693 71.9525 66.3521 92.2165
2012 60.4351 32.3875 39.5649 35.8813 90.6897
2013 82.4448 22.0097 17.5552 14.8233 84.4382
2014 90.2720 7.8271 9.7280 7.4132 76.2044
2015 85.3168 -4.9551 14.6831 12.7442 86.7951
2016 88.3777 3.0608 11.6223 10.1112 86.9983
2017 89.9934 1.6157 10.0066 8.8503 88.4442
2018 81.6664 -8.3269 18.3336 17.6716 96.3891
2019 91.0491 9.3827 8.9509 8.7851 98.1478
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020 and later years 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.0675 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 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 (%)
2010 44.5756 44.5756 55.4244 53.6764 96.8407
2011 88.4263 41.8507 13.5737 13.0778 96.3467
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 2010 accident year and that are outstanding at the end of the tax year shown.
2012 and later years 6.7869 6.7869 6.6612 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 98.1478 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2012 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 (%)
2010 19.0410 19.0410 80.9590 70.2208 86.7362
2011 40.2442 21.2032 59.7558 51.2928 85.8374
2012 57.1497 16.9055 42.8503 36.0225 84.0661
2013 67.8601 10.7104 32.1399 26.4825 82.3975
2014 75.5399 7.6797 24.4601 19.6668 80.4034
2015 80.1157 4.5758 19.8843 15.7539 79.2278
2016 82.1828 2.0672 17.8172 14.2480 79.9677
2017 84.4045 2.2217 15.5955 12.5272 80.3259
2018 85.5195 1.1150 14.4805 11.8685 81.9618
2019 86.2855 0.7661 13.7145 11.5402 84.1460
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 2010 accident year and that are outstanding at the end of the tax year shown.
2020   0.7661 12.9484 11.1993 86.4920
2021   0.7661 12.1823 10.8455 89.0265
2022   0.7661 11.4163 10.4782 91.7830
2023   0.7661 10.6502 10.0969 94.8047
2024 and later years 0.7661 9.8842 9.7011 98.1478
Taxpayers that use the composite method of Notice 88-100 should use 89.9627 percent to discount unpaid losses incurred in this line of business in 2010 and prior years and that are outstanding at the end of the 2020 taxable year.

DRAFTING INFORMATION

The principal author of this revenue procedure is Sarah E. Swan of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Swan at (202) 622-8443 (not a toll-free call).


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