Rev. Proc. 2016-58 - Rev. Proc. 2016–58
Rev. Proc. 2016-58
in: Rev. Proc. 2016-58 - Rev. Proc. 2016–58
Rev. Proc. 2016–58
SECTION 1. PURPOSE
This revenue procedure prescribes the loss payment patterns and discount factors for the 2016 accident year. These factors will be used to compute discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2012–44, 2012–49 I.R.B. 645, 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 unpaid losses under § 846 for a line of business using the 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 2016. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2016, which is 1.56 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 2010 annual statement. See Rev. Proc. 2012–44, 2012–49 I.R.B. 645, 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
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 99.2290 percent to discount unpaid losses incurred in this line of business in the 2016 accident year and that are outstanding at the end of the 2016 and later taxable years.
Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2016 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 (%) |
|---|---|---|---|---|---|
| 2016 | 90.2657 | 90.2657 | 9.7343 | 9.6535 | 99.1701 |
| 2017 | 99.7478 | 9.4822 | 0.2522 | 0.2483 | 98.4669 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 0.1261 | 0.1261 | 0.1251 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2018 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 (%) |
|---|---|---|---|---|---|
| 2016 | 25.7034 | 25.7034 | 74.2966 | 71.8363 | 96.6886 |
| 2017 | 48.2664 | 22.5629 | 51.7336 | 50.2188 | 97.0718 |
| 2018 | 67.8834 | 19.6171 | 32.1166 | 31.2327 | 97.2479 |
| 2019 | 82.0630 | 14.1795 | 17.9370 | 17.4302 | 97.1744 |
| 2020 | 90.4161 | 8.3532 | 9.5839 | 9.2840 | 96.8715 |
| 2021 | 94.6293 | 4.2132 | 5.3707 | 5.1830 | 96.5045 |
| 2022 | 97.0203 | 2.3910 | 2.9797 | 2.8543 | 95.7897 |
| 2023 | 98.2283 | 1.2081 | 1.7717 | 1.6814 | 94.9023 |
| 2024 | 98.6653 | 0.4370 | 1.3347 | 1.2672 | 94.9441 |
| 2025 | 98.8635 | 0.1982 | 1.1365 | 1.0872 | 95.6662 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 0.1982 | 0.9382 | 0.9044 | 96.3940 | |
| 2027 | 0.1982 | 0.7400 | 0.7187 | 97.1264 | |
| 2028 | 0.1982 | 0.5417 | 0.5302 | 97.8602 | |
| 2029 | 0.1982 | 0.3435 | 0.3386 | 98.5845 | |
| 2030 and later years | 0.1982 | 0.1453 | 0.1441 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 97.0950 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 39.5281 | 39.5281 | 60.4719 | 57.8180 | 95.6113 |
| 2017 | 62.0267 | 22.4986 | 37.9733 | 36.0465 | 94.9259 |
| 2018 | 73.7017 | 11.6750 | 26.2983 | 24.8432 | 94.4666 |
| 2019 | 80.0846 | 6.3830 | 19.9154 | 18.7981 | 94.3901 |
| 2020 | 85.7818 | 5.6971 | 14.2182 | 13.3500 | 93.8935 |
| 2021 | 90.2809 | 4.4992 | 9.7191 | 9.0241 | 92.8498 |
| 2022 | 91.9588 | 1.6778 | 8.0412 | 7.4740 | 92.9464 |
| 2023 | 92.9722 | 1.0134 | 7.0278 | 6.5693 | 93.4763 |
| 2024 | 94.0835 | 1.1113 | 5.9165 | 5.5519 | 93.8371 |
| 2025 | 94.7469 | 0.6634 | 5.2531 | 4.9700 | 94.6094 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 0.6634 | 4.5898 | 4.3790 | 95.4073 | |
| 2027 | 0.6634 | 3.9264 | 3.7788 | 96.2399 | |
| 2028 | 0.6634 | 3.2631 | 3.1692 | 97.1241 | |
| 2029 | 0.6634 | 2.5997 | 2.5502 | 98.0937 | |
| 2030 and later years | 0.6634 | 1.9364 | 1.9214 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 96.4927 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 22.8449 | 22.8449 | 77.1551 | 75.5562 | 97.9277 |
| 2017 | 55.8585 | 33.0137 | 44.1415 | 43.4648 | 98.4669 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 22.0707 | 22.0707 | 21.9006 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2018 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 (%) |
|---|---|---|---|---|---|
| 2016 | 6.2515 | 6.2515 | 93.7485 | 91.7295 | 97.8464 |
| 2017 | 43.0154 | 36.7639 | 56.9846 | 56.1110 | 98.4669 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 28.4923 | 28.4923 | 28.2726 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2018 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 (%) |
|---|---|---|---|---|---|
| 2016 | 39.5281 | 39.5281 | 60.4719 | 57.8180 | 95.6113 |
| 2017 | 62.0267 | 22.4986 | 37.9733 | 36.0465 | 94.9259 |
| 2018 | 73.7017 | 11.6750 | 26.2983 | 24.8432 | 94.4666 |
| 2019 | 80.0846 | 6.3830 | 19.9154 | 18.7981 | 94.3901 |
| 2020 | 85.7818 | 5.6971 | 14.2182 | 13.3500 | 93.8935 |
| 2021 | 90.2809 | 4.4992 | 9.7191 | 9.0241 | 92.8498 |
| 2022 | 91.9588 | 1.6778 | 8.0412 | 7.4740 | 92.9464 |
| 2023 | 92.9722 | 1.0134 | 7.0278 | 6.5693 | 93.4763 |
| 2024 | 94.0835 | 1.1113 | 5.9165 | 5.5519 | 93.8371 |
| 2025 | 94.7469 | 0.6634 | 5.2531 | 4.9700 | 94.6094 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 0.6634 | 4.5898 | 4.3790 | 95.4073 | |
| 2027 | 0.6634 | 3.9264 | 3.7788 | 96.2399 | |
| 2028 | 0.6634 | 3.2631 | 3.1692 | 97.1241 | |
| 2029 | 0.6634 | 2.5997 | 2.5502 | 98.0937 | |
| 2030 and later years | 0.6634 | 1.9364 | 1.9214 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 96.4927 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 taxable year. |
Medical Professional 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 (%) |
|---|---|---|---|---|---|
| 2016 | 6.3462 | 6.3462 | 93.6538 | 89.1520 | 95.1953 |
| 2017 | 23.0958 | 16.7496 | 76.9042 | 73.6651 | 95.7881 |
| 2018 | 41.6827 | 18.5868 | 58.3173 | 56.0830 | 96.1686 |
| 2019 | 56.5267 | 14.8440 | 43.4733 | 41.9985 | 96.6076 |
| 2020 | 71.2882 | 14.7615 | 28.7118 | 27.7775 | 96.7458 |
| 2021 | 82.3023 | 11.0141 | 17.6977 | 17.1111 | 96.6856 |
| 2022 | 86.5143 | 4.2120 | 13.4857 | 13.1334 | 97.3871 |
| 2023 | 91.1422 | 4.6279 | 8.8578 | 8.6744 | 97.9290 |
| 2024 | 94.8664 | 3.7242 | 5.1336 | 5.0566 | 98.4989 |
| 2025 | 97.5408 | 2.6745 | 2.4592 | 2.4402 | 99.2290 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 and later years | 2.4592 | – | – | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 taxable year. |
Medical Professional 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 (%) |
|---|---|---|---|---|---|
| 2016 | 1.2044 | 1.2044 | 98.7956 | 91.6674 | 92.7849 |
| 2017 | 4.3376 | 3.1332 | 95.6624 | 89.9398 | 94.0180 |
| 2018 | 11.8161 | 7.4785 | 88.1839 | 83.8063 | 95.0358 |
| 2019 | 24.7088 | 12.8928 | 75.2912 | 72.1207 | 95.7891 |
| 2020 | 42.3863 | 17.6774 | 57.6137 | 55.4311 | 96.2115 |
| 2021 | 57.1600 | 14.7738 | 42.8400 | 41.4072 | 96.6556 |
| 2022 | 68.9797 | 11.8196 | 31.0203 | 30.1417 | 97.1676 |
| 2023 | 82.4247 | 13.4450 | 17.5753 | 17.0624 | 97.0618 |
| 2024 | 86.7084 | 4.2837 | 13.2916 | 13.0116 | 97.8935 |
| 2025 | 91.6701 | 4.9617 | 8.3299 | 8.2144 | 98.6127 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 and later years | 4.9617 | 3.3683 | 3.3423 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 69.0731 | 69.0731 | 30.9269 | 30.3590 | 98.1638 |
| 2017 | 85.5169 | 16.4438 | 14.4831 | 14.2610 | 98.4669 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 7.2415 | 7.2415 | 7.1857 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2018 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 (%) |
|---|---|---|---|---|---|
| 2016 | 60.9719 | 60.9719 | 39.0281 | 37.9001 | 97.1096 |
| 2017 | 82.9059 | 21.9341 | 17.0941 | 16.3869 | 95.8627 |
| 2018 | 89.2783 | 6.3724 | 10.7217 | 10.2205 | 95.3261 |
| 2019 | 91.5605 | 2.2822 | 8.4395 | 8.0800 | 95.7413 |
| 2020 | 94.4255 | 2.8649 | 5.5745 | 5.3189 | 95.4145 |
| 2021 | 96.5899 | 2.1644 | 3.4101 | 3.2206 | 94.4441 |
| 2022 | 97.6023 | 1.0124 | 2.3977 | 2.2506 | 93.8655 |
| 2023 | 98.0034 | 0.4011 | 1.9966 | 1.8815 | 94.2357 |
| 2024 | 98.3410 | 0.3376 | 1.6590 | 1.5706 | 94.6737 |
| 2025 | 98.5727 | 0.2317 | 1.4273 | 1.3617 | 95.3998 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 0.2317 | 1.1957 | 1.1495 | 96.1346 | |
| 2027 | 0.2317 | 0.9640 | 0.9340 | 96.8791 | |
| 2028 | 0.2317 | 0.7324 | 0.7151 | 97.6355 | |
| 2029 | 0.2317 | 0.5007 | 0.4928 | 98.4099 | |
| 2030 and later years | 0.2317 | 0.2691 | 0.2670 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 96.9112 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 54.6589 | 54.6589 | 45.3411 | 44.6328 | 98.4380 |
| 2017 | 84.2314 | 29.5725 | 15.7686 | 15.5268 | 98.4669 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 7.8843 | 7.8843 | 7.8235 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2018 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 (%) |
|---|---|---|---|---|---|
| 2016 | 7.4270 | 7.4270 | 92.5730 | 87.8256 | 94.8717 |
| 2017 | 25.2808 | 17.8538 | 74.7192 | 71.2032 | 95.2943 |
| 2018 | 44.2108 | 18.9301 | 55.7892 | 53.2368 | 95.4250 |
| 2019 | 56.4956 | 12.2848 | 43.5044 | 41.6871 | 95.8227 |
| 2020 | 69.2838 | 12.7883 | 30.7162 | 29.4498 | 95.8772 |
| 2021 | 77.6662 | 8.3823 | 22.3338 | 21.4618 | 96.0953 |
| 2022 | 83.1572 | 5.4910 | 16.8428 | 16.2629 | 96.5568 |
| 2023 | 88.1777 | 5.0205 | 11.8223 | 11.4571 | 96.9106 |
| 2024 | 93.1315 | 4.9539 | 6.8685 | 6.6435 | 96.7242 |
| 2025 | 92.9490 | –0.1826 | 7.0510 | 6.9311 | 98.2990 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 3.2639 | 3.7871 | 3.7499 | 99.0184 | |
| 2027 and later years | 3.2639 | 0.5232 | 0.5192 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.0369 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 10.0721 | 10.0721 | 89.9279 | 84.0612 | 93.4762 |
| 2017 | 24.3995 | 14.3274 | 75.6005 | 70.9339 | 93.8272 |
| 2018 | 37.3366 | 12.9372 | 62.6634 | 59.0027 | 94.1583 |
| 2019 | 52.4142 | 15.0776 | 47.5858 | 44.7284 | 93.9954 |
| 2020 | 64.3437 | 11.9295 | 35.6563 | 33.4040 | 93.6834 |
| 2021 | 73.7950 | 9.4512 | 26.2050 | 24.4004 | 93.1136 |
| 2022 | 79.7756 | 5.9807 | 20.2244 | 18.7539 | 92.7295 |
| 2023 | 84.0963 | 4.3206 | 15.9037 | 14.6923 | 92.3828 |
| 2023 | 85.6878 | 1.5915 | 14.3122 | 13.3176 | 93.0508 |
| 2025 | 86.9224 | 1.2346 | 13.0776 | 12.2812 | 93.9100 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 1.2346 | 11.8431 | 11.2286 | 94.8119 | |
| 2027 | 1.2346 | 10.6085 | 10.1597 | 95.7689 | |
| 2028 | 1.2346 | 9.3740 | 9.0740 | 96.8001 | |
| 2029 | 1.2346 | 8.1394 | 7.9714 | 97.9360 | |
| 2030 and later years | 1.2346 | 6.9048 | 6.8516 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 96.2276 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 42.9881 | 42.9881 | 57.0119 | 55.6793 | 97.6626 |
| 2017 | 71.9931 | 29.0051 | 28.0069 | 27.3175 | 97.5386 |
| 2018 | 84.8250 | 12.8318 | 15.1750 | 14.8121 | 97.6085 |
| 2019 | 92.3500 | 7.5251 | 7.6500 | 7.4597 | 97.5123 |
| 2020 | 96.2665 | 3.9165 | 3.7335 | 3.6291 | 97.2044 |
| 2021 | 97.9880 | 1.7214 | 2.0120 | 1.9509 | 96.9616 |
| 2022 | 98.7958 | 0.8078 | 1.2042 | 1.1672 | 96.9294 |
| 2023 | 99.2445 | 0.4487 | 0.7555 | 0.7332 | 97.0542 |
| 2024 | 99.4543 | 0.2097 | 0.5457 | 0.5333 | 97.7195 |
| 2025 | 99.6370 | 0.1827 | 0.3630 | 0.3575 | 98.4721 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 and later years | 0.1827 | 0.1803 | 0.1789 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 4.5270 | 4.5270 | 95.4730 | 88.8146 | 93.0259 |
| 2017 | 16.0134 | 11.4865 | 83.9866 | 78.6245 | 93.6155 |
| 2018 | 45.1313 | 29.1179 | 54.8687 | 50.5069 | 92.0504 |
| 2019 | 39.2459 | –5.8854 | 60.7541 | 57.2259 | 94.1927 |
| 2020 | 44.8357 | 5.5898 | 55.1643 | 52.4854 | 95.1438 |
| 2021 | 72.1615 | 27.3258 | 27.8385 | 25.7661 | 92.5555 |
| 2022 | 80.4448 | 8.2834 | 19.5552 | 17.8203 | 91.1284 |
| 2023 | 73.2957 | –7.1491 | 26.7043 | 25.3029 | 94.7525 |
| 2024 | 87.4824 | 14.1866 | 12.5176 | 11.4008 | 91.0781 |
| 2025 | 87.7500 | 0.2677 | 12.2500 | 11.3089 | 92.3180 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 0.2677 | 11.9823 | 11.2156 | 93.6014 | |
| 2027 | 0.2677 | 11.7147 | 11.1208 | 94.9310 | |
| 2028 | 0.2677 | 11.4470 | 11.0246 | 96.3099 | |
| 2029 | 0.2677 | 11.1793 | 10.9268 | 97.7413 | |
| 2030 and later years | 0.2677 | 10.9117 | 10.8275 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 95.8264 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 7.1936 | 7.1936 | 92.8064 | 86.0592 | 92.7297 |
| 2017 | 16.9555 | 9.7619 | 83.0445 | 77.5639 | 93.4004 |
| 2018 | 28.3624 | 11.4069 | 71.6376 | 67.2784 | 93.9149 |
| 2019 | 39.7945 | 11.4321 | 60.2055 | 56.8070 | 94.3552 |
| 2020 | 54.3906 | 14.5961 | 45.6094 | 42.9837 | 94.2430 |
| 2021 | 60.9060 | 6.5154 | 39.0940 | 37.0882 | 94.8693 |
| 2022 | 67.7760 | 6.8700 | 32.2240 | 30.7434 | 95.4053 |
| 2023 | 75.7119 | 7.9359 | 24.2881 | 23.2254 | 95.6247 |
| 2024 | 79.5966 | 3.8847 | 20.4034 | 19.6728 | 96.4195 |
| 2025 | 83.9430 | 4.3464 | 16.0570 | 15.5996 | 97.1513 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 4.3464 | 11.7107 | 11.4628 | 97.8837 | |
| 2027 | 4.3464 | 7.3643 | 7.2615 | 98.6044 | |
| 2028 and later years | 4.3464 | 3.0179 | 2.9947 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 98.2573 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 20.1003 | 20.1003 | 79.8997 | 77.4053 | 96.8780 |
| 2017 | 59.2833 | 39.1830 | 40.7167 | 39.1254 | 96.0916 |
| 2018 | 73.0867 | 13.8034 | 26.9133 | 25.8251 | 95.9565 |
| 2019 | 80.3675 | 7.2808 | 19.6325 | 18.8905 | 96.2208 |
| 2020 | 87.7278 | 7.3603 | 12.2722 | 11.7677 | 95.8895 |
| 2021 | 94.4454 | 6.7175 | 5.5546 | 5.1816 | 93.2838 |
| 2022 | 96.5143 | 2.0689 | 3.4857 | 3.1774 | 91.1552 |
| 2023 | 97.9468 | 1.4326 | 2.0532 | 1.7833 | 86.8559 |
| 2024 | 97.4560 | –0.4909 | 2.5440 | 2.3058 | 90.6356 |
| 2025 | 97.0652 | –0.3908 | 2.9348 | 2.7356 | 93.2116 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 0.1836 | 2.7512 | 2.5932 | 94.2578 | |
| 2027 | 0.1836 | 2.5675 | 2.4486 | 95.3671 | |
| 2028 | 0.1836 | 2.3839 | 2.3017 | 96.5527 | |
| 2029 | 0.1836 | 2.2003 | 2.1526 | 97.8320 | |
| 2030 and later years | 0.1836 | 2.0166 | 2.0011 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 96.0251 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 3.4987 | 3.4987 | 96.5013 | 89.5392 | 92.7855 |
| 2017 | 23.2170 | 19.7183 | 76.7830 | 71.0645 | 92.5524 |
| 2018 | 43.7483 | 20.5313 | 56.2517 | 51.4823 | 91.5213 |
| 2019 | 38.9131 | –4.8352 | 61.0869 | 57.1582 | 93.5686 |
| 2020 | 47.9298 | 9.0167 | 52.0702 | 48.9631 | 94.0328 |
| 2021 | 80.0315 | 32.1017 | 19.9685 | 17.3758 | 87.0160 |
| 2022 | 76.5053 | –3.5292 | 23.4947 | 21.2005 | 90.2350 |
| 2023 | 78.1701 | 1.6649 | 21.8299 | 19.8534 | 90.9460 |
| 2024 | 80.0717 | 1.9015 | 19.9283 | 18.2468 | 91.5621 |
| 2025 | 79.8791 | –0.1926 | 20.1209 | 18.7255 | 93.0650 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 1.1246 | 18.9963 | 17.8843 | 94.1462 | |
| 2027 | 1.1246 | 17.8717 | 17.0300 | 95.2901 | |
| 2028 | 1.1246 | 16.7471 | 16.1623 | 96.5079 | |
| 2029 | 1.1246 | 15.6225 | 15.2811 | 97.8145 | |
| 2030 and later years | 1.1246 | 14.4979 | 14.3861 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 95.9885 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 1.5423 | 1.5423 | 98.4577 | 93.0298 | 94.4871 |
| 2017 | 20.9273 | 19.3850 | 79.0727 | 74.9455 | 94.7805 |
| 2018 | 30.4705 | 9.5433 | 69.5295 | 66.4972 | 95.6390 |
| 2019 | 46.3043 | 15.8337 | 53.6957 | 51.5778 | 96.0558 |
| 2020 | 51.8464 | 5.5421 | 48.1536 | 46.7973 | 97.1834 |
| 2021 | 72.7869 | 20.9405 | 27.2131 | 26.4241 | 97.1007 |
| 2022 | 82.0967 | 9.3097 | 17.9033 | 17.4542 | 97.4915 |
| 2023 | 89.2630 | 7.1664 | 10.7370 | 10.5045 | 97.8346 |
| 2024 | 95.3692 | 6.1062 | 4.6308 | 4.5147 | 97.4934 |
| 2025 | 96.7995 | 1.4303 | 3.2005 | 3.1437 | 98.2266 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 1.4303 | 1.7702 | 1.7513 | 98.9364 | |
| 2027 and later years | 1.4303 | 0.3399 | 0.3372 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 98.9741 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 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 (%) |
|---|---|---|---|---|---|
| 2016 | 55.6145 | 55.6145 | 44.3855 | 43.8006 | 98.6824 |
| 2017 | 89.3328 | 33.7182 | 10.6672 | 10.5037 | 98.4669 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 5.3336 | 5.3336 | 5.2925 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2018 taxable year. |
Warranty
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
|---|---|---|---|---|---|
| 2016 | 85.4101 | 85.4101 | 14.5899 | 14.4669 | 99.1571 |
| 2017 | 99.5388 | 14.1287 | 0.4612 | 0.4541 | 98.4669 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 0.2306 | 0.2306 | 0.2288 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 99.2290 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2018 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 (%) |
|---|---|---|---|---|---|
| 2016 | 21.8973 | 21.8973 | 78.1027 | 72.4793 | 92.8001 |
| 2017 | 43.4962 | 21.5989 | 56.5038 | 51.8433 | 91.7519 |
| 2018 | 56.0061 | 12.5099 | 43.9939 | 40.0450 | 91.0240 |
| 2019 | 63.5544 | 7.5482 | 36.4456 | 33.0628 | 90.7181 |
| 2020 | 68.9880 | 5.4337 | 31.0120 | 28.1027 | 90.6188 |
| 2021 | 73.9567 | 4.9687 | 26.0433 | 23.5338 | 90.3641 |
| 2022 | 76.0580 | 2.1013 | 23.9420 | 21.7833 | 90.9836 |
| 2023 | 77.6365 | 1.5785 | 22.3635 | 20.5323 | 91.8119 |
| 2024 | 80.1194 | 2.4828 | 19.8806 | 18.3505 | 92.3034 |
| 2025 | 81.3456 | 1.2262 | 18.6544 | 17.4010 | 93.2810 |
| 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 2016 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2026 | 1.2262 | 17.4281 | 16.4367 | 94.3111 | |
| 2027 | 1.2262 | 16.2019 | 15.4573 | 95.4044 | |
| 2028 | 1.2262 | 14.9757 | 14.4627 | 96.5746 | |
| 2029 | 1.2262 | 13.7494 | 13.4525 | 97.8408 | |
| 2030 and later years | 1.2262 | 12.5232 | 12.4266 | 99.2290 | |
| Taxpayers that use the composite method of Notice 88–100 should use 96.0431 percent to discount unpaid losses incurred in this line of business in 2016 and prior years and that are outstanding at the end of the 2026 taxable year. |
SECTION 4. DRAFTING INFORMATION
The principal author of this revenue procedure is Sharon Y. Horn of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure contact Ms. Horn at (202) 317-4426 (not a toll free number).
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.