Rev. Proc. 2007-9
Rev. Proc. 2007-9
SECTION 1. PURPOSE
This revenue procedure prescribes the loss payment patterns and discount factors for the 2006 accident year. These factors will be used for computing discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2003-17, 2003-1 C.B. 427, for background concerning the loss payment patterns and application of the discount factors.
SEC. 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.
SEC. 3. TABLES OF DISCOUNT FACTORS
.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2006. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2006, which is 3.98 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, 2003-1 C.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. 980.
.04 Section 2.03(4) of Rev. Proc 2003-17 requested comments 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 issue will be addressed in the new determination year, which is 2007. Accordingly, taxpayers may still submit comments that should include a reference to Rev. Proc. 2007-9 on this issue to the following address:
CC:PA:LPD:PR (Rev. Proc. 2007-9), room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Comments may be hand delivered between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD (Rev. Proc. 2007-9), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Alternatively, e-mail comments to Notice.Comments@irscounsel.treas.gov. All comments will be available for public inspection and copying.
.05 Tables.
| Tables of Factors to be Used to Discount Unpaid Losses Incurred in Accident Year 2006 |
|---|
| --- |
| (Interest rate: 3.98 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 98.0675 percent to discount unpaid losses incurred in this line of business in the 2006 accident year and that are outstanding at the end of the 2006 and later taxable years. |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0675 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2006 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 (%) |
| 2006 | 89.6468 | 89.6468 | 10.3532 | 10.1356 | 97.8981 |
| 2007 | 99.6845 | 10.0377 | 0.3155 | 0.3035 | 96.1907 |
| 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 2006 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2008 and later years | 0.1578 | 0.1578 | 0.1547 | 98.0675 | |
| 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 2006 and prior years and that are outstanding at the end of the 2008 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 (%) |
| 2006 | 28.8244 | 28.8244 | 71.1756 | 65.9439 | 92.6497 |
| 2007 | 54.9871 | 26.1626 | 45.0129 | 41.8903 | 93.0628 |
| 2008 | 72.8039 | 17.8168 | 27.1961 | 25.3896 | 93.3575 |
| 2009 | 85.0572 | 12.2533 | 14.9428 | 13.9054 | 93.0572 |
| 2010 | 91.6276 | 6.5704 | 8.3724 | 7.7589 | 92.6725 |
| 2011 | 94.9514 | 3.3239 | 5.0486 | 4.6784 | 92.6676 |
| 2012 | 97.0453 | 2.0938 | 2.9547 | 2.7295 | 92.3768 |
| 2013 | 98.1574 | 1.1121 | 1.8426 | 1.7041 | 92.4822 |
| 2014 | 98.7370 | 0.5796 | 1.2630 | 1.1809 | 93.4978 |
| 2015 | 99.1070 | 0.3700 | 0.8930 | 0.8506 | 95.2504 |
| 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. | |||||
| 2016 | 0.3700 | 0.5230 | 0.5072 | 96.9692 | |
| 2017 and later years | 0.3700 | 0.1530 | 0.1501 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.1689 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 40.9985 | 40.9985 | 59.0015 | 53.7593 | 91.1153 |
| 2007 | 65.8439 | 24.8454 | 34.1561 | 30.5639 | 89.4832 |
| 2008 | 77.5023 | 11.6583 | 22.4977 | 19.8923 | 88.4193 |
| 2009 | 84.6221 | 7.1198 | 15.3779 | 13.4239 | 87.2935 |
| 2010 | 90.2455 | 5.6234 | 9.7545 | 8.2239 | 84.3094 |
| 2011 | 92.2780 | 2.0325 | 7.7220 | 6.4788 | 83.8997 |
| 2012 | 94.3974 | 2.1195 | 5.6026 | 4.5754 | 81.6658 |
| 2013 | 95.2526 | 0.8552 | 4.7474 | 3.8854 | 81.8439 |
| 2014 | 96.2792 | 1.0266 | 3.7208 | 2.9933 | 80.4470 |
| 2015 | 96.4323 | 0.1531 | 3.5677 | 2.9562 | 82.8624 |
| 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. | |||||
| 2016 | 0.1531 | 3.4145 | 2.9177 | 85.4512 | |
| 2017 | 0.1531 | 3.2614 | 2.8777 | 88.2363 | |
| 2018 | 0.1531 | 3.1083 | 2.8361 | 91.2444 | |
| 2019 | 0.1531 | 2.9551 | 2.7928 | 94.5083 | |
| 2020 and later years | 0.1531 | 2.8020 | 2.7478 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 88.1508 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 38.3328 | 38.3328 | 61.6672 | 58.1879 | 94.3581 |
| 2007 | 58.8485 | 20.5156 | 41.1515 | 39.5839 | 96.1907 |
| 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 2006 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2008 and later years | 20.5758 | 20.5758 | 20.1781 | 98.0675 | |
| 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 2006 and prior years and that are outstanding at the end of the 2008 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 (%) |
| 2006 | 4.0723 | 4.0723 | 95.9277 | 90.7812 | 94.6350 |
| 2007 | 40.7639 | 36.6916 | 59.2361 | 56.9796 | 96.1907 |
| 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 2006 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2008 and later years | 29.6180 | 29.6180 | 29.0457 | 98.0675 | |
| 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 2006 and prior years and that are outstanding at the end of the 2008 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 (%) |
| 2006 | 40.9985 | 40.9985 | 59.0015 | 53.7593 | 91.1153 |
| 2007 | 65.8439 | 24.8454 | 34.1561 | 30.5639 | 89.4832 |
| 2008 | 77.5023 | 11.6583 | 22.4977 | 19.8923 | 88.4193 |
| 2009 | 84.6221 | 7.1198 | 15.3779 | 13.4239 | 87.2935 |
| 2010 | 90.2455 | 5.6234 | 9.7545 | 8.2239 | 84.3094 |
| 2011 | 92.2780 | 2.0325 | 7.7220 | 6.4788 | 83.8997 |
| 2012 | 94.3974 | 2.1195 | 5.6026 | 4.5754 | 81.6658 |
| 2013 | 95.2526 | 0.8552 | 4.7474 | 3.8854 | 81.8439 |
| 2014 | 96.2792 | 1.0266 | 3.7208 | 2.9933 | 80.4470 |
| 2015 | 96.4323 | 0.1531 | 3.5677 | 2.9562 | 82.8624 |
| 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. | |||||
| 2016 | 0.1531 | 3.4145 | 2.9177 | 85.4512 | |
| 2017 | 0.1531 | 3.2614 | 2.8777 | 88.2363 | |
| 2018 | 0.1531 | 3.1083 | 2.8361 | 91.2444 | |
| 2019 | 0.1531 | 2.9551 | 2.7928 | 94.5083 | |
| 2020 and later years | 0.1531 | 2.8020 | 2.7478 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 88.1508 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 7.3447 | 7.3447 | 92.6553 | 83.4596 | 90.0754 |
| 2007 | 29.0191 | 21.6744 | 70.9809 | 64.6798 | 91.1228 |
| 2008 | 53.3108 | 24.2917 | 46.6892 | 42.4836 | 90.9925 |
| 2009 | 69.1517 | 15.8409 | 30.8483 | 28.0215 | 90.8363 |
| 2010 | 82.0981 | 12.9464 | 17.9019 | 15.9352 | 89.0139 |
| 2011 | 86.3995 | 4.3014 | 13.6005 | 12.1832 | 89.5793 |
| 2012 | 89.7111 | 3.3116 | 10.2889 | 9.2913 | 90.3038 |
| 2013 | 92.4688 | 2.7577 | 7.5312 | 6.8490 | 90.9420 |
| 2014 | 94.5163 | 2.0475 | 5.4837 | 5.0337 | 91.7950 |
| 2015 | 95.7635 | 1.2471 | 4.2365 | 3.9624 | 93.5285 |
| 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. | |||||
| 2016 | 1.2471 | 2.9894 | 2.8483 | 95.2819 | |
| 2017 | 1.2471 | 1.7422 | 1.6900 | 97.0008 | |
| 2018 and later years | 1.2471 | 0.4951 | 0.4855 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 95.9709 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 0.8316 | 0.8316 | 99.1684 | 84.5630 | 85.2721 |
| 2007 | 7.4573 | 6.6257 | 92.5427 | 81.1723 | 87.7134 |
| 2008 | 23.5575 | 16.1002 | 76.4425 | 67.9856 | 88.9369 |
| 2009 | 41.0062 | 17.4487 | 58.9938 | 52.8989 | 89.6685 |
| 2010 | 55.5832 | 14.5770 | 44.4168 | 40.1400 | 90.3712 |
| 2011 | 68.9413 | 13.3581 | 31.0587 | 28.1163 | 90.5261 |
| 2012 | 78.2095 | 9.2682 | 21.7905 | 19.7844 | 90.7937 |
| 2013 | 82.8727 | 4.6632 | 17.1273 | 15.8167 | 92.3480 |
| 2014 | 86.3178 | 3.4451 | 13.6822 | 12.9332 | 94.5260 |
| 2015 | 91.0834 | 4.7656 | 8.9166 | 8.5884 | 96.3200 |
| 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 2006 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2016 and later years | 4.7656 | 4.1510 | 4.0708 | 98.0675 | |
| 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 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 79.7790 | 79.7790 | 20.2210 | 19.5491 | 96.6770 |
| 2007 | 94.9417 | 15.1627 | 5.0583 | 4.8656 | 96.1907 |
| 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 2006 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2008 and later years | 2.5292 | 2.5292 | 2.4803 | 98.0675 | |
| 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 2006 and prior years and that are outstanding at the end of the 2008 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 (%) |
| 2006 | 59.7445 | 59.7445 | 40.2555 | 37.4341 | 92.9914 |
| 2007 | 81.0347 | 21.2902 | 18.9653 | 17.2142 | 90.7672 |
| 2008 | 87.3325 | 6.2978 | 12.6675 | 11.4775 | 90.6059 |
| 2009 | 91.0659 | 3.7334 | 8.9341 | 8.1273 | 90.9698 |
| 2010 | 95.1781 | 4.1122 | 4.8219 | 4.2575 | 88.2964 |
| 2011 | 95.7605 | 0.5824 | 4.2395 | 3.8331 | 90.4149 |
| 2012 | 97.0539 | 1.2933 | 2.9461 | 2.6668 | 90.5202 |
| 2013 | 97.6441 | 0.5903 | 2.3559 | 2.1711 | 92.1567 |
| 2014 | 98.7037 | 1.0596 | 1.2963 | 1.1770 | 90.8007 |
| 2015 | 98.6217 | \-0.0821 | 1.3783 | 1.3076 | 94.8644 |
| 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. | |||||
| 2016 | 0.5226 | 0.8558 | 0.8267 | 96.6061 | |
| 2017 and later years | 0.5226 | 0.3332 | 0.3267 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 96.9550 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 69.1729 | 69.1729 | 30.8271 | 29.7431 | 96.4837 |
| 2007 | 91.2168 | 22.0439 | 8.7832 | 8.4487 | 96.1907 |
| 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 2006 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2008 and later years | 4.3916 | 4.3916 | 4.3068 | 98.0675 | |
| 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 2006 and prior years and that are outstanding at the end of the 2008 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 (%) |
| 2006 | 14.9618 | 14.9618 | 85.0382 | 75.3352 | 88.5898 |
| 2007 | 36.2113 | 21.2494 | 63.7887 | 56.6653 | 88.8328 |
| 2008 | 54.2876 | 18.0763 | 45.7124 | 40.4881 | 88.5713 |
| 2009 | 64.2163 | 9.9288 | 35.7837 | 31.9751 | 89.3567 |
| 2010 | 73.2732 | 9.0569 | 26.7268 | 24.0123 | 89.8438 |
| 2011 | 80.5748 | 7.3016 | 19.4252 | 17.5225 | 90.2054 |
| 2012 | 87.6200 | 7.0452 | 12.3800 | 11.0359 | 89.1433 |
| 2013 | 89.9155 | 2.2955 | 10.0845 | 9.1344 | 90.5790 |
| 2014 | 93.3946 | 3.4791 | 6.6054 | 5.9503 | 90.0827 |
| 2015 | 94.6170 | 1.2223 | 5.3830 | 4.9407 | 91.7827 |
| 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. | |||||
| 2016 | 1.2223 | 4.1607 | 3.8909 | 93.5158 | |
| 2017 | 1.2223 | 2.9383 | 2.7993 | 95.2689 | |
| 2018 | 1.2223 | 1.7160 | 1.6643 | 96.9877 | |
| 2019 and later years | 1.2223 | 0.4936 | 0.4841 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.6440 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 19.1133 | 19.1133 | 80.8867 | 69.7012 | 86.1714 |
| 2007 | 36.4434 | 17.3301 | 63.5566 | 54.8037 | 86.2281 |
| 2008 | 52.1648 | 15.7215 | 47.8352 | 40.9536 | 85.6140 |
| 2009 | 63.2383 | 11.0734 | 36.7617 | 31.2919 | 85.1209 |
| 2010 | 72.0780 | 8.8397 | 27.9220 | 23.5235 | 84.2469 |
| 2011 | 75.9021 | 3.8241 | 24.0979 | 20.5602 | 85.3195 |
| 2012 | 82.9305 | 7.0284 | 17.0695 | 14.2116 | 83.2573 |
| 2013 | 85.1441 | 2.2136 | 14.8559 | 12.5200 | 84.2763 |
| 2014 | 89.3006 | 4.1565 | 10.6994 | 8.7799 | 82.0597 |
| 2015 | 89.9898 | 0.6892 | 10.0102 | 8.4266 | 84.1796 |
| 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. | |||||
| 2016 | 0.6892 | 9.3210 | 8.0591 | 86.4622 | |
| 2017 | 0.6892 | 8.6318 | 7.6771 | 88.9398 | |
| 2018 | 0.6892 | 7.9426 | 7.2798 | 91.6560 | |
| 2019 | 0.6892 | 7.2533 | 6.8668 | 94.6705 | |
| 2020 and later years | 0.6892 | 6.5641 | 6.4373 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 90.4497 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 43.1926 | 43.1926 | 56.8074 | 53.5261 | 94.2237 |
| 2007 | 72.2008 | 29.0082 | 27.7992 | 26.0766 | 93.8032 |
| 2008 | 84.5632 | 12.3625 | 15.4368 | 14.5083 | 93.9856 |
| 2009 | 91.9316 | 7.3684 | 8.0684 | 7.5722 | 93.8501 |
| 2010 | 95.8729 | 3.9413 | 4.1271 | 3.8546 | 93.3975 |
| 2011 | 97.7804 | 1.9075 | 2.2196 | 2.0629 | 92.9415 |
| 2012 | 98.7957 | 1.0153 | 1.2043 | 1.1098 | 92.1473 |
| 2013 | 99.2491 | 0.4535 | 0.7509 | 0.6915 | 92.0971 |
| 2014 | 99.5195 | 0.2703 | 0.4805 | 0.4434 | 92.2703 |
| 2015 | 99.6353 | 0.1159 | 0.3647 | 0.3429 | 94.0275 |
| 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. | |||||
| 2016 | 0.1159 | 0.2488 | 0.2384 | 95.8137 | |
| 2017 | 0.1159 | 0.1330 | 0.1297 | 97.5849 | |
| 2018 and later years | 0.1159 | 0.0171 | 0.0168 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 96.3943 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 6.5804 | 6.5804 | 93.4196 | 80.2960 | 85.9520 |
| 2007 | 26.7183 | 20.1379 | 73.2817 | 62.9570 | 85.9110 |
| 2008 | 43.1834 | 16.4652 | 56.8166 | 48.6731 | 85.6671 |
| 2009 | 43.9209 | 0.7375 | 56.0791 | 49.8583 | 88.9071 |
| 2010 | 54.3806 | 10.4597 | 45.6194 | 41.1768 | 90.2617 |
| 2011 | 78.3630 | 23.9824 | 21.6370 | 18.3607 | 84.8579 |
| 2012 | 82.8643 | 4.5013 | 17.1357 | 14.5014 | 84.6271 |
| 2013 | 68.2184 | \-14.6459 | 31.7816 | 30.0132 | 94.4355 |
| 2014 | 79.1582 | 10.9399 | 20.8418 | 20.0522 | 96.2118 |
| 2015 | 89.6963 | 10.5381 | 10.3037 | 10.1045 | 98.0675 |
| 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 2006 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2016 and later years | 98.0675 | ||||
| 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 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 9.4198 | 9.4198 | 90.5802 | 76.5659 | 84.5283 |
| 2007 | 20.5845 | 11.1647 | 79.4155 | 68.2285 | 85.9133 |
| 2008 | 36.7807 | 16.1962 | 63.2193 | 54.4286 | 86.0950 |
| 2009 | 55.5974 | 18.8167 | 44.4026 | 37.4074 | 84.2460 |
| 2010 | 66.6238 | 11.0263 | 33.3762 | 27.6526 | 82.8511 |
| 2011 | 77.2636 | 10.6399 | 22.7364 | 17.9036 | 78.7443 |
| 2012 | 79.1888 | 1.9251 | 20.8112 | 16.6531 | 80.0197 |
| 2013 | 83.6816 | 4.4928 | 16.3184 | 12.7345 | 78.0378 |
| 2014 | 85.5507 | 1.8691 | 14.4493 | 11.3354 | 78.4496 |
| 2015 | 85.7291 | 0.1784 | 14.2709 | 11.6047 | 81.3169 |
| 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. | |||||
| 2016 | 0.1784 | 14.0925 | 11.8846 | 84.3329 | |
| 2017 | 0.1784 | 13.9141 | 12.1757 | 87.5062 | |
| 2018 | 0.1784 | 13.7357 | 12.4784 | 90.8463 | |
| 2019 | 0.1784 | 13.5573 | 12.7931 | 94.3632 | |
| 2020 and later years | 0.1784 | 13.3789 | 13.1204 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 89.8177 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 taxable year. |
| Reinsurance A (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 (%) |
| 2006 | 25.0571 | 25.0571 | 74.9429 | 69.5252 | 92.7708 |
| 2007 | 52.0402 | 26.9831 | 47.9598 | 44.7775 | 93.3645 |
| 2008 | 82.4709 | 30.4307 | 17.5291 | 15.5292 | 88.5910 |
| 2009 | 85.6387 | 3.1678 | 14.3613 | 12.9170 | 89.9434 |
| 2010 | 92.7228 | 7.0840 | 7.2772 | 6.2075 | 85.3001 |
| 2011 | 91.8604 | \-0.8624 | 8.1396 | 7.3339 | 90.1015 |
| 2012 | 96.5016 | 4.6412 | 3.4984 | 2.8932 | 82.6989 |
| 2013 | 96.1872 | \-0.3143 | 3.8128 | 3.3288 | 87.3078 |
| 2014 | 97.6206 | 1.4333 | 2.3794 | 1.9998 | 84.0432 |
| 2015 | 97.8419 | 0.2214 | 2.1581 | 1.8536 | 85.8925 |
| 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. | |||||
| 2016 | 0.2214 | 1.9367 | 1.7017 | 87.8641 | |
| 2017 | 0.2214 | 1.7154 | 1.5437 | 89.9920 | |
| 2018 | 0.2214 | 1.4940 | 1.3794 | 92.3296 | |
| 2019 | 0.2214 | 1.2727 | 1.2086 | 94.9667 | |
| 2020 and later years | 0.2214 | 1.0513 | 1.0310 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 90.9754 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 taxable year. |
| Reinsurance B (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 (%) |
| 2006 | 8.9223 | 8.9223 | 91.0777 | 76.3687 | 83.8500 |
| 2007 | 27.3618 | 18.4395 | 72.6382 | 60.6053 | 83.4344 |
| 2008 | 44.5758 | 17.2140 | 55.4242 | 45.4641 | 82.0294 |
| 2009 | 53.8781 | 9.3023 | 46.1219 | 37.7880 | 81.9307 |
| 2010 | 60.8896 | 7.0115 | 39.1104 | 32.1422 | 82.1834 |
| 2011 | 69.7327 | 8.8430 | 30.2673 | 24.4042 | 80.6288 |
| 2012 | 76.6292 | 6.8965 | 23.3708 | 18.3431 | 78.4871 |
| 2013 | 79.4030 | 2.7738 | 20.5970 | 16.2447 | 78.8690 |
| 2014 | 83.8936 | 4.4906 | 16.1064 | 12.3121 | 76.4422 |
| 2015 | 80.1707 | \-3.7229 | 19.8293 | 16.5983 | 83.7063 |
| 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. | |||||
| 2016 | 1.1805 | 18.6487 | 16.0552 | 86.0925 | |
| 2017 | 1.1805 | 17.4682 | 15.4904 | 88.6775 | |
| 2018 | 1.1805 | 16.2877 | 14.9031 | 91.4992 | |
| 2019 | 1.1805 | 15.1072 | 14.2924 | 94.6071 | |
| 2020 and later years | 1.1805 | 13.9266 | 13.6575 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 90.3273 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 taxable year. |
| Reinsurance C (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 (%) |
| 2006 | 17.1195 | 17.1195 | 82.8805 | 74.5159 | 89.9077 |
| 2007 | 46.6590 | 29.5395 | 53.3410 | 47.3601 | 88.7874 |
| 2008 | 67.7135 | 21.0545 | 32.2865 | 27.7757 | 86.0287 |
| 2009 | 78.1379 | 10.4244 | 21.8621 | 18.2513 | 83.4837 |
| 2010 | 89.7346 | 11.5967 | 10.2654 | 7.1524 | 69.6754 |
| 2011 | 92.1268 | 2.3921 | 7.8732 | 4.9978 | 63.4788 |
| 2012 | 89.7323 | \-2.3945 | 10.2677 | 7.6384 | 74.3925 |
| 2013 | 90.0460 | 0.3137 | 9.9540 | 7.6225 | 76.5774 |
| 2014 | 94.8867 | 4.8407 | 5.1133 | 2.9898 | 58.4711 |
| 2015 | 86.7041 | \-8.1827 | 13.2959 | 11.4527 | 86.1367 |
| 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. | |||||
| 2016 | 1.4277 | 11.8683 | 10.4527 | 88.0727 | |
| 2017 | 1.4277 | 10.4406 | 9.4129 | 90.1568 | |
| 2018 | 1.4277 | 9.0129 | 8.3317 | 92.4421 | |
| 2019 | 1.4277 | 7.5852 | 7.2075 | 95.0203 | |
| 2020 and later years | 1.4277 | 6.1575 | 6.0385 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 91.0632 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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 (%) |
| 2006 | 62.9320 | 62.9320 | 37.0680 | 35.7122 | 96.3422 |
| 2007 | 88.4950 | 25.5631 | 11.5050 | 11.0667 | 96.1907 |
| 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 2006 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2008 and later years | 5.7525 | 5.7525 | 5.6413 | 98.0675 | |
| 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 2006 and prior years and that are outstanding at the end of the 2008 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 (%) |
| 2006 | 28.2489 | 28.2489 | 71.7511 | 64.2325 | 89.5214 |
| 2007 | 57.8739 | 29.6249 | 42.1261 | 36.5803 | 86.8351 |
| 2008 | 71.2999 | 13.4260 | 28.7001 | 24.3455 | 84.8274 |
| 2009 | 77.7584 | 6.4585 | 22.2416 | 18.7287 | 84.2059 |
| 2010 | 81.9301 | 4.1717 | 18.0699 | 15.2202 | 84.2298 |
| 2011 | 83.7739 | 1.8437 | 16.2261 | 13.9459 | 85.9472 |
| 2012 | 86.5350 | 2.7611 | 13.4650 | 11.6854 | 86.7836 |
| 2013 | 88.4367 | 1.9017 | 11.5633 | 10.2113 | 88.3080 |
| 2014 | 89.5926 | 1.1559 | 10.4074 | 9.4390 | 90.6955 |
| 2015 | 91.6441 | 2.0515 | 8.3559 | 7.7228 | 92.4232 |
| 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. | |||||
| 2016 | 2.0515 | 6.3045 | 5.9383 | 94.1919 | |
| 2017 | 2.0515 | 4.2530 | 4.0828 | 95.9970 | |
| 2018 | 2.0515 | 2.2016 | 2.1534 | 97.8116 | |
| 2019 and later years | 2.0515 | 0.1501 | 0.1472 | 98.0675 | |
| Taxpayers that use the composite method of Notice 88-100 should use 95.2214 percent to discount unpaid losses incurred in this line of business in 2006 and prior years and that are outstanding at the end of the 2016 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).
Disclaimer. This may not be the most current version of this information. Users should consult official sources to verify information on this site is recent and current. Marble does not warrant or represent the accuracy, completeness or reliability of the information contained on this site.