This revenue procedure prescribes the loss payment patterns and discount factors for the 2012 determination year. These factors will be used to compute discounted unpaid losses under § 846 of the Internal Revenue Code.
.01 Section 846 provides that discounted unpaid losses must be separately determined for each accident year of each line of business by applying an interest rate determined under § 846(c) and the appropriate loss payment pattern to the amount of unpaid losses as measured at the end of the tax year.
Section 846(d) directs the Secretary to use the most recent aggregate loss payment data of property and casualty insurance companies to determine and publish a loss payment pattern for each line of business every five years. This payment pattern is used to discount unpaid losses for the accident year ending with a determination year and for each of the four succeeding accident years.
Section 846(e) allows a taxpayer to make an election in each determination year to use its own historical payment pattern instead of the Secretary’s tables. This election does not apply to any international insurance or reinsurance line of business.
Section 846(f)(4) defines the term “line of business” as a category for the reporting of loss payment patterns on the annual statement for property and casualty companies approved by the National Association of Insurance Commissioners (NAIC), except that the multiple peril lines shall be treated as a single line of business. Section 846(f)(5) states that the term “multiple peril lines” means the lines of business relating to farmowners multiple peril, homeowners multiple peril, commercial multiple peril, ocean marine, aircraft (all perils), and boiler and machinery.
.02 Pursuant to § 846(d), the Secretary has determined a loss payment pattern for each property and casualty line of business for the 2012 determination year that, pursuant to § 846(d)(1), must be applied through the 2016 accident year.
.03 The loss payment patterns for the 2012 determination year are based on the aggregate loss payment information reported on the 2010 annual statements of property and casualty insurance companies and compiled by A.M. Best and Co. The tables are arranged in alphabetical order. Following is an additional explanation of some of the tables and changes to the tables.
(1) NAIC Changes in Lines of Business. The NAIC has changed the reporting of unpaid loss experience on the annual statement for warranty companies. These changes are reflected in the lines of business set forth below.
(2) Format of the Tables. To simplify the tables, the columns entitled Tax Year provide the actual tax years, rather than AY+0, AY+1, and so on.
(3) Accident Years Not Separately Reported on the NAIC Annual Statement. Section V of Notice 88-100, 1988-2 C.B. 439, sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. The tables separately provide discount factors for taxpayers who elect to use the composite method of section V of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. 980.
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.
.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2012. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2012, 2.89 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 2012 annual statement.
.03 Tables.
| Accident and Health (Other Than Disability Income or Credit Disability Insurance) |
|---|
| Taxpayers that do not use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the 2012 and later taxable years. |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2012 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 (%) |
| 2012 | 90.2657 | 90.2657 | 9.7343 | 9.5863 | 98.4790 |
| 2013 | 99.7478 | 9.4822 | 0.2522 | 0.2451 | 97.2010 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2014 and later years | 0.1261 | 0.1261 | 0.1243 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 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 (%) |
| 2012 | 25.7034 | 25.7034 | 74.2966 | 69.8790 | 94.0541 |
| 2013 | 48.2664 | 22.5629 | 51.7336 | 49.0119 | 94.7389 |
| 2014 | 67.8834 | 19.6171 | 32.1166 | 30.5298 | 95.0593 |
| 2015 | 82.0630 | 14.1795 | 17.9370 | 17.0291 | 94.9384 |
| 2016 | 90.4161 | 8.3532 | 9.5839 | 9.0483 | 94.4114 |
| 2017 | 94.6293 | 4.2132 | 5.3707 | 5.0362 | 93.7708 |
| 2018 | 97.0203 | 2.3910 | 2.9797 | 2.7564 | 92.5056 |
| 2019 | 98.2283 | 1.2081 | 1.7717 | 1.6107 | 90.9135 |
| 2020 | 98.6653 | 0.4370 | 1.3347 | 1.2140 | 90.9566 |
| 2021 | 98.8635 | 0.1982 | 1.1365 | 1.0480 | 92.2160 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 0.1982 | 0.9382 | 0.8772 | 93.4963 | |
| 2023 | 0.1982 | 0.7400 | 0.7015 | 94.7956 | |
| 2024 | 0.1982 | 0.5417 | 0.5207 | 96.1082 | |
| 2025 | 0.1982 | 0.3435 | 0.3346 | 97.4146 | |
| 2026 and later years | 0.1982 | 0.1453 | 0.1432 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.9072 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 39.5281 | 39.5281 | 60.4719 | 55.7933 | 92.2631 |
| 2013 | 62.0267 | 22.4986 | 37.9733 | 34.5843 | 91.0753 |
| 2014 | 73.7017 | 11.6750 | 26.2983 | 23.7413 | 90.2768 |
| 2015 | 80.0846 | 6.3830 | 19.9154 | 17.9529 | 90.1459 |
| 2016 | 85.7818 | 5.6971 | 14.2182 | 12.6929 | 89.2717 |
| 2017 | 90.2809 | 4.4992 | 9.7191 | 8.4960 | 87.4154 |
| 2018 | 91.9588 | 1.6778 | 8.0412 | 7.0396 | 87.5436 |
| 2019 | 92.9722 | 1.0134 | 7.0278 | 6.2151 | 88.4353 |
| 2020 | 94.0835 | 1.1113 | 5.9165 | 5.2674 | 89.0295 |
| 2021 | 94.7469 | 0.6634 | 5.2531 | 4.7468 | 90.3608 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 0.6634 | 4.5898 | 4.2111 | 91.7492 | |
| 2023 | 0.6634 | 3.9264 | 3.6599 | 93.2124 | |
| 2024 | 0.6634 | 3.2631 | 3.0928 | 94.7824 | |
| 2025 | 0.6634 | 2.5997 | 2.5093 | 96.5231 | |
| 2026 and later years | 0.6634 | 1.9364 | 1.9090 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 93.7821 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 22.8449 | 22.8449 | 77.1551 | 74.2475 | 96.2315 |
| 2013 | 55.8585 | 33.0137 | 44.1415 | 42.9060 | 97.2010 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2014 and later years | 22.0707 | 22.0707 | 21.7586 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 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 (%) |
| 2012 | 6.2515 | 6.2515 | 93.7485 | 90.0777 | 96.0845 |
| 2013 | 43.0154 | 36.7639 | 56.9846 | 55.3896 | 97.2010 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2014 and later years | 28.4923 | 28.4923 | 28.0893 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 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 (%) |
| 2012 | 39.5281 | 39.5281 | 60.4719 | 55.7933 | 92.2631 |
| 2013 | 62.0267 | 22.4986 | 37.9733 | 34.5843 | 91.0753 |
| 2014 | 73.7017 | 11.6750 | 26.2983 | 23.7413 | 90.2768 |
| 2015 | 80.0846 | 6.3830 | 19.9154 | 17.9529 | 90.1459 |
| 2016 | 85.7818 | 5.6971 | 14.2182 | 12.6929 | 89.2717 |
| 2017 | 90.2809 | 4.4992 | 9.7191 | 8.4960 | 87.4154 |
| 2018 | 91.9588 | 1.6778 | 8.0412 | 7.0396 | 87.5436 |
| 2019 | 92.9722 | 1.0134 | 7.0278 | 6.2151 | 88.4353 |
| 2020 | 94.0835 | 1.1113 | 5.9165 | 5.2674 | 89.0295 |
| 2021 | 94.7469 | 0.6634 | 5.2531 | 4.7468 | 90.3608 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 0.6634 | 4.5898 | 4.2111 | 91.7492 | |
| 2023 | 0.6634 | 3.9264 | 3.6599 | 93.2124 | |
| 2024 | 0.6634 | 3.2631 | 3.0928 | 94.7824 | |
| 2025 | 0.6634 | 2.5997 | 2.5093 | 96.5231 | |
| 2026 and later years | 0.6634 | 1.9364 | 1.9090 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 93.7821 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 6.3462 | 6.3462 | 93.6538 | 85.6244 | 91.4266 |
| 2013 | 23.0958 | 16.7496 | 76.9042 | 71.1091 | 92.4645 |
| 2014 | 41.6827 | 18.5868 | 58.3173 | 54.3106 | 93.1295 |
| 2015 | 56.5267 | 14.8440 | 43.4733 | 40.8232 | 93.9041 |
| 2016 | 71.2882 | 14.7615 | 28.7118 | 27.0298 | 94.1415 |
| 2017 | 82.3023 | 11.0141 | 17.6977 | 16.6387 | 94.0165 |
| 2018 | 86.5143 | 4.2120 | 13.4857 | 12.8472 | 95.2653 |
| 2019 | 91.1422 | 4.6279 | 8.8578 | 8.5242 | 96.2335 |
| 2020 | 94.8664 | 3.7242 | 5.1336 | 4.9929 | 97.2591 |
| 2021 | 97.5408 | 2.6745 | 2.4592 | 2.4244 | 98.5856 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 and later years | 2.4592 | - | - | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 1.2044 | 1.2044 | 98.7956 | 86.1709 | 87.2213 |
| 2013 | 4.3376 | 3.1332 | 95.6624 | 85.4830 | 89.3591 |
| 2014 | 11.8161 | 7.4785 | 88.1839 | 80.3677 | 91.1365 |
| 2015 | 24.7088 | 12.8928 | 75.2912 | 69.6126 | 92.4579 |
| 2016 | 42.3863 | 17.6774 | 57.6137 | 53.6934 | 93.1954 |
| 2017 | 57.1600 | 14.7738 | 42.8400 | 40.2594 | 93.9762 |
| 2018 | 68.9797 | 11.8196 | 31.0203 | 29.4337 | 94.8851 |
| 2019 | 82.4247 | 13.4450 | 17.5753 | 16.6464 | 94.7145 |
| 2020 | 86.7084 | 4.2837 | 13.2916 | 12.7823 | 96.1682 |
| 2021 | 91.6701 | 4.9617 | 8.3299 | 8.1188 | 97.4659 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 and later years | 4.9617 | 3.3683 | 3.3206 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 93.6211 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 69.0731 | 69.0731 | 30.9269 | 29.8935 | 96.6586 |
| 2013 | 85.5169 | 16.4438 | 14.4831 | 14.0777 | 97.2010 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2014 and later years | 7.2415 | 7.2415 | 7.1391 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 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 (%) |
| 2012 | 60.9719 | 60.9719 | 39.0281 | 37.0187 | 94.8513 |
| 2013 | 82.9059 | 21.9341 | 17.0941 | 15.8398 | 92.6624 |
| 2014 | 89.2783 | 6.3724 | 10.7217 | 9.8337 | 91.7181 |
| 2015 | 91.5605 | 2.2822 | 8.4395 | 7.8029 | 92.4579 |
| 2016 | 94.4255 | 2.8649 | 5.5745 | 5.1224 | 91.8898 |
| 2017 | 96.5899 | 2.1644 | 3.4101 | 3.0750 | 90.1726 |
| 2018 | 97.6023 | 1.0124 | 2.3977 | 2.1369 | 89.1235 |
| 2019 | 98.0034 | 0.4011 | 1.9966 | 1.7918 | 89.7436 |
| 2020 | 98.3410 | 0.3376 | 1.6590 | 1.5012 | 90.4859 |
| 2021 | 98.5727 | 0.2317 | 1.4273 | 1.3096 | 91.7483 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 0.2317 | 1.1957 | 1.1124 | 93.0370 | |
| 2023 | 0.2317 | 0.9640 | 0.9096 | 94.3539 | |
| 2024 | 0.2317 | 0.7324 | 0.7009 | 95.7035 | |
| 2025 | 0.2317 | 0.5007 | 0.4862 | 97.0975 | |
| 2026 and later years | 0.2317 | 0.2691 | 0.2653 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 93.1358 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 54.6589 | 54.6589 | 45.3411 | 44.0509 | 97.1546 |
| 2013 | 84.2314 | 29.5725 | 15.7686 | 15.3272 | 97.2010 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2014 and later years | 7.8843 | 7.8843 | 7.7728 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 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 (%) |
| 2012 | 7.4270 | 7.4270 | 92.5730 | 84.1387 | 90.8891 |
| 2013 | 25.2808 | 17.8538 | 74.7192 | 68.4604 | 91.6236 |
| 2014 | 44.2108 | 18.9301 | 55.7892 | 51.2373 | 91.8409 |
| 2015 | 56.4956 | 12.2848 | 43.5044 | 40.2571 | 92.5355 |
| 2016 | 69.2838 | 12.7883 | 30.7162 | 28.4487 | 92.6181 |
| 2017 | 77.6662 | 8.3823 | 22.3338 | 20.7683 | 92.9904 |
| 2018 | 83.1572 | 5.4910 | 16.8428 | 15.7987 | 93.8010 |
| 2019 | 88.1777 | 5.0205 | 11.8223 | 11.1628 | 94.4213 |
| 2020 | 93.1315 | 4.9539 | 6.8685 | 6.4605 | 94.0597 |
| 2021 | 92.9490 | -0.1826 | 7.0510 | 6.8324 | 96.8986 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 3.2639 | 3.7871 | 3.7191 | 98.2030 | |
| 2023 and later years | 3.2639 | 0.5232 | 0.5158 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.2239 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 10.0721 | 10.0721 | 89.9279 | 79.6509 | 88.5720 |
| 2013 | 24.3995 | 14.3274 | 75.6005 | 67.4199 | 89.1791 |
| 2014 | 37.3366 | 12.9372 | 62.6634 | 56.2456 | 89.7583 |
| 2015 | 52.4142 | 15.0776 | 47.5858 | 42.5771 | 89.4745 |
| 2016 | 64.3437 | 11.9295 | 35.6563 | 31.7069 | 88.9239 |
| 2017 | 73.7950 | 9.4512 | 26.2050 | 23.0365 | 87.9085 |
| 2018 | 79.7756 | 5.9807 | 20.2244 | 17.6357 | 87.2005 |
| 2019 | 84.0963 | 4.3206 | 15.9037 | 13.7628 | 86.5381 |
| 2020 | 85.6878 | 1.5915 | 14.3122 | 12.5462 | 87.6607 |
| 2021 | 86.9224 | 1.2346 | 13.0776 | 11.6565 | 89.1329 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 1.2346 | 11.8431 | 10.7411 | 90.6950 | |
| 2023 | 1.2346 | 10.6085 | 9.7992 | 92.3713 | |
| 2024 | 1.2346 | 9.3740 | 8.8302 | 94.1988 | |
| 2025 | 1.2346 | 8.1394 | 7.8331 | 96.2365 | |
| 2026 and later years | 1.2346 | 6.9048 | 6.8072 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 92.6009 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 42.9881 | 42.9881 | 57.0119 | 54.6061 | 95.7801 |
| 2013 | 71.9931 | 29.0051 | 28.0069 | 26.7630 | 95.5587 |
| 2014 | 84.8250 | 12.8318 | 15.1750 | 14.5205 | 95.6868 |
| 2015 | 92.3500 | 7.5251 | 7.6500 | 7.3071 | 95.5183 |
| 2016 | 96.2665 | 3.9165 | 3.7335 | 3.5456 | 94.9681 |
| 2017 | 97.9880 | 1.7214 | 2.0120 | 1.9019 | 94.5282 |
| 2018 | 98.7958 | 0.8078 | 1.2042 | 1.1375 | 94.4596 |
| 2019 | 99.2445 | 0.4487 | 0.7555 | 0.7152 | 94.6679 |
| 2020 | 99.4543 | 0.2097 | 0.5457 | 0.5231 | 95.8548 |
| 2021 | 99.6370 | 0.1827 | 0.3630 | 0.3529 | 97.2105 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 and later years | 0.1827 | 0.1803 | 0.1777 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5029 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 4.5270 | 4.5270 | 95.4730 | 83.8330 | 87.8080 |
| 2013 | 16.0134 | 11.4865 | 83.9866 | 74.6045 | 88.8291 |
| 2014 | 45.1313 | 29.1179 | 54.8687 | 47.2249 | 86.0690 |
| 2015 | 39.2459 | -5.8854 | 60.7541 | 54.5596 | 89.8039 |
| 2016 | 44.8357 | 5.5898 | 55.1643 | 50.4663 | 91.4837 |
| 2017 | 72.1615 | 27.3258 | 27.8385 | 24.2070 | 86.9550 |
| 2018 | 80.4448 | 8.2834 | 19.5552 | 16.5044 | 84.3991 |
| 2019 | 73.2957 | -7.1491 | 26.7043 | 24.2330 | 90.7459 |
| 2020 | 87.4824 | 14.1866 | 12.5176 | 10.5432 | 84.2267 |
| 2021 | 87.7500 | 0.2677 | 12.2500 | 10.5764 | 86.3381 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 0.2677 | 11.9823 | 10.6106 | 88.5517 | |
| 2023 | 0.2677 | 11.7147 | 10.6457 | 90.8750 | |
| 2024 | 0.2677 | 11.4470 | 10.6819 | 93.3158 | |
| 2025 | 0.2677 | 11.1793 | 10.7191 | 95.8828 | |
| 2026 and later years | 0.2677 | 10.9117 | 10.7573 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 92.8642 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 7.1936 | 7.1936 | 92.8064 | 80.9429 | 87.2170 |
| 2013 | 16.9555 | 9.7619 | 83.0445 | 73.3802 | 88.3625 |
| 2014 | 28.3624 | 11.4069 | 71.6376 | 63.9304 | 89.2413 |
| 2015 | 39.7945 | 11.4321 | 60.2055 | 54.1818 | 89.9948 |
| 2016 | 54.3906 | 14.5961 | 45.6094 | 40.9422 | 89.7670 |
| 2017 | 60.9060 | 6.5154 | 39.0940 | 35.5165 | 90.8490 |
| 2018 | 67.7760 | 6.8700 | 32.2240 | 29.5744 | 91.7775 |
| 2019 | 75.7119 | 7.9359 | 24.2881 | 22.3793 | 92.1411 |
| 2020 | 79.5966 | 3.8847 | 20.4034 | 19.0856 | 93.5415 |
| 2021 | 83.9430 | 4.3464 | 16.0570 | 15.2285 | 94.8401 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 4.3464 | 11.7107 | 11.2599 | 96.1507 | |
| 2023 | 4.3464 | 7.3643 | 7.1766 | 97.4508 | |
| 2024 and later years | 4.3464 | 3.0179 | 2.9752 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 96.3135 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 20.1003 | 20.1003 | 79.8997 | 75.4585 | 94.4415 |
| 2013 | 59.2833 | 39.1830 | 40.7167 | 37.8941 | 93.0676 |
| 2014 | 73.0867 | 13.8034 | 26.9133 | 24.9877 | 92.8453 |
| 2015 | 80.3675 | 7.2808 | 19.6325 | 18.3246 | 93.3382 |
| 2016 | 87.7278 | 7.3603 | 12.2722 | 11.3883 | 92.7976 |
| 2017 | 94.4454 | 6.7175 | 5.5546 | 4.9035 | 88.2774 |
| 2018 | 96.5143 | 2.0689 | 3.4857 | 2.9466 | 84.5335 |
| 2019 | 97.9468 | 1.4326 | 2.0532 | 1.5786 | 76.8884 |
| 2020 | 97.4560 | -0.4909 | 2.5440 | 2.1222 | 83.4180 |
| 2021 | 97.0652 | -0.3908 | 2.9348 | 2.5799 | 87.9068 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 0.1836 | 2.7512 | 2.4682 | 89.7139 | |
| 2023 | 0.1836 | 2.5675 | 2.3533 | 91.6537 | |
| 2024 | 0.1836 | 2.3839 | 2.2350 | 93.7531 | |
| 2025 | 0.1836 | 2.2003 | 2.1133 | 96.0476 | |
| 2026 and later years | 0.1836 | 2.0166 | 1.9881 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 89.7139 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 3.4987 | 3.4987 | 96.5013 | 84.4091 | 87.4694 |
| 2013 | 23.2170 | 19.7183 | 76.7830 | 66.8474 | 87.0601 |
| 2014 | 43.7483 | 20.5313 | 56.2517 | 47.9534 | 85.2478 |
| 2015 | 38.9131 | -4.8352 | 61.0869 | 54.2434 | 88.7977 |
| 2016 | 47.9298 | 9.0167 | 52.0702 | 46.6654 | 89.6201 |
| 2017 | 80.0315 | 32.1017 | 19.9685 | 15.4517 | 77.3805 |
| 2018 | 76.5053 | -3.5292 | 23.4947 | 19.4751 | 82.8913 |
| 2019 | 78.1701 | 1.6649 | 21.8299 | 18.3492 | 84.0554 |
| 2020 | 80.0717 | 1.9015 | 19.9283 | 16.9507 | 85.0580 |
| 2021 | 79.8791 | -0.1926 | 20.1209 | 17.6359 | 87.6494 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 1.1246 | 18.9963 | 17.0048 | 89.5164 | |
| 2023 | 1.1246 | 17.8717 | 16.3555 | 91.5162 | |
| 2024 | 1.1246 | 16.7471 | 15.6875 | 93.6726 | |
| 2025 | 1.1246 | 15.6225 | 15.0001 | 96.0158 | |
| 2026 and later years | 1.1246 | 14.4979 | 14.2928 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 91.3700 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 1.5423 | 1.5423 | 98.4577 | 88.8020 | 90.1930 |
| 2013 | 20.9273 | 19.3850 | 79.0727 | 71.7053 | 90.6827 |
| 2014 | 30.4705 | 9.5433 | 69.5295 | 64.0974 | 92.1873 |
| 2015 | 46.3043 | 15.8337 | 53.6957 | 49.8889 | 92.9103 |
| 2016 | 51.8464 | 5.5421 | 48.1536 | 45.7090 | 94.9234 |
| 2017 | 72.7869 | 20.9405 | 27.2131 | 25.7890 | 94.7671 |
| 2018 | 82.0967 | 9.3097 | 17.9033 | 17.0911 | 95.4629 |
| 2019 | 89.2630 | 7.1664 | 10.7370 | 10.3158 | 96.0773 |
| 2020 | 95.3692 | 6.1062 | 4.6308 | 4.4201 | 95.4510 |
| 2021 | 96.7995 | 1.4303 | 3.2005 | 3.0970 | 96.7682 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 1.4303 | 1.7702 | 1.7357 | 98.0539 | |
| 2023 and later years | 1.4303 | 0.3399 | 0.3351 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0539 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 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 (%) |
| 2012 | 55.6145 | 55.6145 | 44.3855 | 43.3187 | 97.5967 |
| 2013 | 89.3328 | 33.7182 | 10.6672 | 10.3687 | 97.2010 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2014 and later years | 5.3336 | 5.3336 | 5.2582 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 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 (%) |
| 2012 | 85.4101 | 85.4101 | 14.5899 | 14.3645 | 98.4555 |
| 2013 | 99.5388 | 14.1287 | 0.4612 | 0.4483 | 97.2010 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2014 and later years | 0.2306 | 0.2306 | 0.2273 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 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 (%) |
| 2012 | 21.8973 | 21.8973 | 78.1027 | 68.3810 | 87.5527 |
| 2013 | 43.4962 | 21.5989 | 56.5038 | 48.4485 | 85.7437 |
| 2014 | 56.0061 | 12.5099 | 43.9939 | 37.1592 | 84.4646 |
| 2015 | 63.5544 | 7.5482 | 36.4456 | 30.5766 | 83.8965 |
| 2016 | 68.9880 | 5.4337 | 31.0120 | 25.9486 | 83.6730 |
| 2017 | 73.9567 | 4.9687 | 26.0433 | 21.6586 | 83.1638 |
| 2018 | 76.0580 | 2.1013 | 23.9420 | 20.1531 | 84.1746 |
| 2019 | 77.6365 | 1.5785 | 22.3635 | 19.1344 | 85.5607 |
| 2020 | 80.1194 | 2.4828 | 19.8806 | 17.1689 | 86.3597 |
| 2021 | 81.3456 | 1.2262 | 18.6544 | 16.4212 | 88.0286 |
| 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 2012 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2022 | 1.2262 | 17.4281 | 15.6519 | 89.8084 | |
| 2023 | 1.2262 | 16.2019 | 14.8604 | 91.7203 | |
| 2024 | 1.2262 | 14.9757 | 14.0461 | 93.7927 | |
| 2025 | 1.2262 | 13.7494 | 13.2082 | 96.0635 | |
| 2026 and later years | 1.2262 | 12.5232 | 12.3460 | 98.5856 | |
| Taxpayers that use the composite method of Notice 88-100 should use 92.3332 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year. | |||||
The Internal Revenue Bulletin is produced and published by the Internal Revenue Service and contains IRS pronouncements affecting tax analysis under the Code and the Regulations, including but not limited to Revenue Procedures, Revenue Rulings, Notices and Announcements. Access the IRS site at https://www.irs.gov/help/irsgov-accessibility for information concerning accessibility of IRS materials. While every effort has been made to ensure that the IRB database files available through the TouchTax application are accurate, those using TouchTax for legal research should verify their results against the printed versions of the IRBs available from the IRS.