This revenue procedure prescribes the loss payment patterns and discount factors for the 2008 accident year. These factors will be used for computing discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2008-10, 2008-3 I.R.B. 290, for background concerning the loss payment patterns and application of the discount factors. This revenue procedure also corrects the discount factors for the Composite and International (Composite) lines of business for the 2006 and 2007 accident years in Rev. Proc. 2007-9, 2007-3 I.R.B. 278, and Rev. Proc. 2008-10, 2008-3 I.R.B. 290, for taxpayers that use the composite method of Notice 88-100, 1988-2 C.B. 439.
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.
.01 Rev. Proc. 2007-9, 2007-3 I.R.B. 278, prescribes the loss payment patterns and discount factors for the 2006 accident year. Rev. Proc. 2008-10, 2008-3 I.R.B. 290, prescribes the loss payment patterns and discount factors for the 2007 accident year. An error has been discovered in the composite discount factors for the 2006 and 2007 accident years that were determined for the Composite and International (Composite) lines of business for taxpayers that use the composite method of Notice 88-100, which is used for computing discounted unpaid losses for accident years not separately reported on the annual statement.
.02 Rev. Proc. 2007-9 as corrected for the Composite line of business provides: “Taxpayers that use the composite method of Notice 88-100 should use 90.1284 percent to discount unpaid losses incurred in this line of business in 2006 and prior years that are outstanding at the end of the 2016 taxable year.”
.03 Rev. Proc. 2007-9 as corrected for the International (Composite) line of business provides: “Taxpayers that use the composite method of Notice 88-100 should use 90.1284 percent to discount unpaid losses incurred in this line of business in 2006 and prior years that are outstanding at the end of the 2016 taxable year.”
.04 Rev. Proc. 2008-10 as corrected for the Composite line of business provides: “Taxpayers that use the composite method of Notice 88-100 should use 92.4923 percent to discount unpaid losses incurred in this line of business in 2007 and prior years that are outstanding at the end of the 2017 taxable year.”
.05 Rev. Proc. 2008-10 as corrected for the International (Composite) line of business provides: “Taxpayers that use the composite method of Notice 88-100 should use 92.4923 percent to discount unpaid losses incurred in this line of business in 2007 and prior years that are outstanding at the end of the 2017 taxable year.”
.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2008. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2008, which is 4.06 percent, and by assuming all loss payments occur in the middle of the calendar year.
.02 If the groupings of individual lines of business on the annual statement change, taxpayers must discount the unpaid losses on the affected lines of business in accordance with the discounting patterns that would have applied to those unpaid losses based on their classification on the 2005 annual statement. See Rev. Proc. 2008-10, 2008-3 I.R.B. 290, section 2, for additional background on discounting under section 846 and the use of the Secretary’s tables.
.03 Section V of Notice 88-100, 1988-2 C.B. 439, sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. The tables separately provide discount factors for taxpayers who elect to use the composite method of section V of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. 980.
.04 Tables.
| Tables of Factors to be Used to Discount Unpaid Losses Incurred in Accident Year 2008 |
|---|
| (Interest rate: 4.06 percent) |
| Accident and Health (Other Than Disability Income or Credit Disability Insurance) |
|---|
| Taxpayers that do not use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the 2008 and later taxable years. |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2008 taxable year. |
| Auto Physical Damage | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 89.4096 | 89.4096 | 10.5904 | 10.3639 | 97.8613 |
| 2009 | 99.6848 | 10.2752 | 0.3152 | 0.3030 | 96.1174 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2010 and later years | 0.1576 | 0.1576 | 0.1545 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 taxable year. | |||||
| Commercial Auto/Truck Liability/Medical | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 23.6718 | 23.6718 | 76.3282 | 70.1942 | 91.9637 |
| 2009 | 47.5425 | 23.8708 | 52.4575 | 48.6936 | 92.8249 |
| 2010 | 66.6847 | 19.1421 | 33.3153 | 31.1437 | 93.4816 |
| 2011 | 81.5105 | 14.8258 | 18.4895 | 17.2843 | 93.4819 |
| 2012 | 90.0548 | 8.5443 | 9.9452 | 9.2701 | 93.2115 |
| 2013 | 94.7311 | 4.6763 | 5.2689 | 4.8762 | 92.5459 |
| 2014 | 97.0602 | 2.3292 | 2.9398 | 2.6982 | 91.7820 |
| 2015 | 98.1174 | 1.0572 | 1.8826 | 1.7293 | 91.8572 |
| 2016 | 98.8692 | 0.7518 | 1.1308 | 1.0326 | 91.3161 |
| 2017 | 99.1160 | 0.2467 | 0.8840 | 0.8228 | 93.0737 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 0.2467 | 0.6373 | 0.6045 | 94.8560 | |
| 2019 | 0.2467 | 0.3906 | 0.3774 | 96.6210 | |
| 2020 and later years | 0.2467 | 0.1439 | 0.1410 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 95.5540 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Composite | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 34.7004 | 34.7004 | 65.2996 | 59.2808 | 90.7829 |
| 2009 | 58.6076 | 23.9072 | 41.3924 | 37.2999 | 90.1131 |
| 2010 | 71.7608 | 13.1532 | 28.2392 | 25.3968 | 89.9346 |
| 2011 | 81.4987 | 9.7379 | 18.5013 | 16.4943 | 89.1521 |
| 2012 | 87.8488 | 6.3501 | 12.1512 | 10.6863 | 87.9440 |
| 2013 | 91.4226 | 3.5739 | 8.5774 | 7.4744 | 87.1415 |
| 2014 | 93.4057 | 1.9831 | 6.5943 | 5.7549 | 87.2720 |
| 2015 | 94.2280 | 0.8222 | 5.7720 | 5.1498 | 89.2206 |
| 2016 | 95.4875 | 1.2595 | 4.5125 | 4.0741 | 90.2843 |
| 2017 | 96.3560 | 0.8685 | 3.6440 | 3.3535 | 92.0287 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 0.8685 | 2.7754 | 2.6036 | 93.8109 | |
| 2019 | 0.8685 | 1.9069 | 1.8233 | 95.6199 | |
| 2020 | 0.8685 | 1.0383 | 1.0114 | 97.4044 | |
| 2021 and later years | 0.8685 | 0.1698 | 0.1664 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.3096 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Fidelity/Surety | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 25.2328 | 25.2328 | 74.7672 | 71.0916 | 95.0839 |
| 2009 | 61.1025 | 35.8698 | 38.8975 | 37.3872 | 96.1174 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2010 and later years | 19.4487 | 19.4487 | 19.0655 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 taxable year. | |||||
| Financial Guaranty/Mortgage Guaranty | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 7.7824 | 7.7824 | 92.2176 | 88.2568 | 95.7050 |
| 2009 | 62.1390 | 54.3565 | 37.8610 | 36.3911 | 96.1174 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2010 and later years | 18.9305 | 18.9305 | 18.5575 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 taxable year. | |||||
| International (Composite) | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 34.7004 | 34.7004 | 65.2996 | 59.2808 | 90.7829 |
| 2009 | 58.6076 | 23.9072 | 41.3924 | 37.2999 | 90.1131 |
| 2010 | 71.7608 | 13.1532 | 28.2392 | 25.3968 | 89.9346 |
| 2011 | 81.4987 | 9.7379 | 18.5013 | 16.4943 | 89.1521 |
| 2012 | 87.8488 | 6.3501 | 12.1512 | 10.6863 | 87.9440 |
| 2013 | 91.4226 | 3.5739 | 8.5774 | 7.4744 | 87.1415 |
| 2014 | 93.4057 | 1.9831 | 6.5943 | 5.7549 | 87.2720 |
| 2015 | 94.2280 | 0.8222 | 5.7720 | 5.1498 | 89.2206 |
| 2016 | 95.4875 | 1.2595 | 4.5125 | 4.0741 | 90.2843 |
| 2017 | 96.3560 | 0.8685 | 3.6440 | 3.3535 | 92.0287 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 0.8685 | 2.7754 | 2.6036 | 93.8109 | |
| 2019 | 0.8685 | 1.9069 | 1.8233 | 95.6199 | |
| 2020 | 0.8685 | 1.0383 | 1.0114 | 97.4044 | |
| 2021 and later years | 0.8685 | 0.1698 | 0.1664 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.3096 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Medical Malpractice — Claims-Made | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 4.9425 | 4.9425 | 95.0575 | 85.0276 | 89.4485 |
| 2009 | 19.9369 | 14.9944 | 80.0631 | 73.1839 | 91.4078 |
| 2010 | 44.3489 | 24.4120 | 55.6511 | 51.2525 | 92.0962 |
| 2011 | 64.8374 | 20.4885 | 35.1626 | 32.4331 | 92.2375 |
| 2012 | 80.2530 | 15.4156 | 19.7470 | 18.0245 | 91.2770 |
| 2013 | 85.7907 | 5.5377 | 14.2093 | 13.1072 | 92.2442 |
| 2014 | 91.2722 | 5.4815 | 8.7278 | 8.0478 | 92.2082 |
| 2015 | 93.3314 | 2.0593 | 6.6686 | 6.2739 | 94.0812 |
| 2016 | 96.1257 | 2.7942 | 3.8743 | 3.6782 | 94.9374 |
| 2017 | 97.6538 | 1.5281 | 2.3462 | 2.2687 | 96.6961 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 1.5281 | 0.8182 | 0.8021 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0440 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Medical Malpractice — Occurrence | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 1.5878 | 1.5878 | 98.4122 | 82.1817 | 83.5076 |
| 2009 | 4.4720 | 2.8842 | 95.5280 | 82.5760 | 86.4417 |
| 2010 | 17.7738 | 13.3018 | 82.2262 | 72.3595 | 88.0005 |
| 2011 | 35.8814 | 18.1076 | 64.1186 | 56.8257 | 88.6260 |
| 2012 | 52.9447 | 17.0633 | 47.0553 | 41.7266 | 88.6757 |
| 2013 | 68.4348 | 15.4901 | 31.5652 | 27.6193 | 87.4993 |
| 2014 | 79.5616 | 11.1268 | 20.4384 | 17.3902 | 85.0861 |
| 2015 | 85.8198 | 6.2582 | 14.1802 | 11.7123 | 82.5961 |
| 2016 | 90.1267 | 4.3069 | 9.8733 | 7.7943 | 78.9437 |
| 2017 | 90.3701 | 0.2434 | 9.6299 | 7.8625 | 81.6469 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 0.2434 | 9.3865 | 7.9335 | 84.5197 | |
| 2019 | 0.2434 | 9.1431 | 8.0073 | 87.5770 | |
| 2020 | 0.2434 | 8.8998 | 8.0841 | 90.8352 | |
| 2021 | 0.2434 | 8.6564 | 8.1641 | 94.3126 | |
| 2022 and later years | 0.2434 | 8.4130 | 8.2473 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 86.1528 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Miscellaneous Casualty | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 72.9064 | 72.9064 | 27.0936 | 26.1964 | 96.6888 |
| 2009 | 93.5836 | 20.6771 | 6.4164 | 6.1673 | 96.1174 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2010 and later years | 3.2082 | 3.2082 | 3.1450 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 taxable year. | |||||
| Multiple Peril Lines (Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability (Ocean Marine, Aircraft (All Perils), Boiler and Machinery)) | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 52.5880 | 52.5880 | 47.4120 | 44.2537 | 93.3385 |
| 2009 | 80.0449 | 27.4570 | 19.9551 | 18.0416 | 90.4110 |
| 2010 | 86.1625 | 6.1175 | 13.8375 | 12.5336 | 90.5767 |
| 2011 | 90.7452 | 4.5827 | 9.2548 | 8.3676 | 90.4137 |
| 2012 | 93.9006 | 3.1555 | 6.0994 | 5.4885 | 89.9844 |
| 2013 | 95.7613 | 1.8607 | 4.2387 | 3.8132 | 89.9627 |
| 2014 | 96.8755 | 1.1141 | 3.1245 | 2.8315 | 90.6219 |
| 2015 | 97.6715 | 0.7960 | 2.3285 | 2.1345 | 91.6659 |
| 2016 | 98.0329 | 0.3615 | 1.9671 | 1.8524 | 94.1706 |
| 2017 | 98.6810 | 0.6481 | 1.3190 | 1.2665 | 96.0207 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 0.6481 | 0.6709 | 0.6568 | 97.8997 | |
| 2019 and later years | 0.6481 | 0.0228 | 0.0224 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.9053 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Other (Including Credit) | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 67.9528 | 67.9528 | 32.0472 | 30.8190 | 96.1676 |
| 2009 | 89.4609 | 21.5081 | 10.5391 | 10.1299 | 96.1174 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2010 and later years | 5.2695 | 5.2695 | 5.1657 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 taxable year. | |||||
| Other Liability — Claims-Made | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 5.8796 | 5.8796 | 94.1204 | 83.2369 | 88.4367 |
| 2009 | 18.8735 | 12.9938 | 81.1265 | 73.3613 | 90.4283 |
| 2010 | 41.6840 | 22.8105 | 58.3160 | 53.0709 | 91.0056 |
| 2011 | 62.5322 | 20.8483 | 37.4678 | 33.9583 | 90.6333 |
| 2012 | 73.5207 | 10.9885 | 26.4793 | 24.1277 | 91.1189 |
| 2013 | 82.0036 | 8.4829 | 17.9964 | 16.4539 | 91.4286 |
| 2014 | 88.6279 | 6.6244 | 11.3721 | 10.3644 | 91.1391 |
| 2015 | 90.7107 | 2.0828 | 9.2893 | 8.6605 | 93.2317 |
| 2016 | 94.8439 | 4.1332 | 5.1561 | 4.7959 | 93.0145 |
| 2017 | 96.2689 | 1.4249 | 3.7311 | 3.5370 | 94.7977 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 1.4249 | 2.3062 | 2.2270 | 96.5683 | |
| 2019 and later years | 1.4249 | 0.8812 | 0.8639 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.0645 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Other Liability — Occurrence | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 13.6594 | 13.6594 | 86.3406 | 74.5578 | 86.3531 |
| 2009 | 24.8389 | 11.1795 | 75.1611 | 66.1806 | 88.0517 |
| 2010 | 41.7792 | 16.9403 | 58.2208 | 51.5868 | 88.6055 |
| 2011 | 58.4995 | 16.7203 | 41.5005 | 36.6249 | 88.2518 |
| 2012 | 69.5197 | 11.0203 | 30.4803 | 26.8702 | 88.1560 |
| 2013 | 77.7513 | 8.2316 | 22.2487 | 19.5641 | 87.9336 |
| 2014 | 84.2243 | 6.4730 | 15.7757 | 13.7553 | 87.1929 |
| 2015 | 83.2275 | -0.9968 | 16.7725 | 15.3306 | 91.4032 |
| 2016 | 88.8524 | 5.6249 | 11.1476 | 10.2151 | 91.6347 |
| 2017 | 91.3852 | 2.5328 | 8.6148 | 8.0461 | 93.3986 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 2.5328 | 6.0820 | 5.7891 | 95.1836 | |
| 2019 | 2.5328 | 3.5492 | 3.4404 | 96.9345 | |
| 2020 and later years | 2.5328 | 1.0164 | 0.9964 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.7637 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Private Passenger Auto Liability/Medical | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 42.6108 | 42.6108 | 57.3892 | 54.0511 | 94.1835 |
| 2009 | 71.5827 | 28.9719 | 28.4173 | 26.6915 | 93.9269 |
| 2010 | 84.6947 | 13.1120 | 15.3053 | 14.3997 | 94.0826 |
| 2011 | 92.3556 | 7.6610 | 7.6444 | 7.1693 | 93.7860 |
| 2012 | 96.2369 | 3.8812 | 3.7631 | 3.5012 | 93.0391 |
| 2013 | 97.9275 | 1.6907 | 2.0725 | 1.9187 | 92.5799 |
| 2014 | 98.7719 | 0.8444 | 1.2281 | 1.1352 | 92.4394 |
| 2015 | 99.2692 | 0.4973 | 0.7308 | 0.6740 | 92.2334 |
| 2016 | 99.5053 | 0.2361 | 0.4947 | 0.4606 | 93.0998 |
| 2017 | 99.6440 | 0.1387 | 0.3560 | 0.3378 | 94.8818 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 0.1387 | 0.2174 | 0.2101 | 96.6446 | |
| 2019 and later years | 0.1387 | 0.0787 | 0.0772 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.0811 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Products Liability — Claims-Made | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 1.0259 | 1.0259 | 98.9741 | 84.7900 | 84.6586 |
| 2009 | 11.7927 | 10.7667 | 88.2073 | 76.2088 | 86.3973 |
| 2010 | 29.3642 | 17.5716 | 70.6358 | 61.3781 | 86.8939 |
| 2011 | 55.1655 | 25.8012 | 44.8345 | 37.5503 | 83.7531 |
| 2012 | 83.4171 | 28.2516 | 16.5829 | 10.2554 | 61.8434 |
| 2013 | 64.8933 | -18.5238 | 35.1067 | 29.5679 | 84.2229 |
| 2014 | 82.3346 | 17.4414 | 17.6654 | 12.9765 | 73.4571 |
| 2015 | 86.3986 | 4.0640 | 13.6014 | 9.3576 | 68.7991 |
| 2016 | 76.3310 | -10.0676 | 23.6690 | 20.0075 | 84.5305 |
| 2017 | 78.7910 | 2.4600 | 21.2090 | 18.3104 | 86.3331 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 2.4600 | 18.7490 | 16.5444 | 88.2412 | |
| 2019 | 2.4600 | 16.2890 | 14.7066 | 90.2855 | |
| 2020 | 2.4600 | 13.8290 | 12.7943 | 92.5176 | |
| 2021 | 2.4600 | 11.3691 | 10.8043 | 95.0326 | |
| 2022 and later years | 2.4600 | 8.9091 | 8.7336 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 89.2840 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Products Liability — Occurrence | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 5.0466 | 5.0466 | 94.9534 | 80.1653 | 84.4260 |
| 2009 | 13.6935 | 8.6469 | 86.3065 | 74.5994 | 86.4354 |
| 2010 | 28.2541 | 14.5606 | 71.7459 | 62.7748 | 87.4961 |
| 2011 | 41.3083 | 13.0542 | 58.6917 | 52.0070 | 88.6104 |
| 2012 | 59.3693 | 18.0610 | 40.6307 | 35.6944 | 87.8509 |
| 2013 | 73.0717 | 13.7024 | 26.9283 | 23.1659 | 86.0279 |
| 2014 | 74.6612 | 1.5895 | 25.3388 | 22.4849 | 88.7371 |
| 2015 | 78.9833 | 4.3221 | 21.0167 | 18.9889 | 90.3513 |
| 2016 | 86.1231 | 7.1398 | 13.8769 | 12.4765 | 89.9085 |
| 2017 | 88.6931 | 2.5700 | 11.3069 | 10.3614 | 91.6379 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 2.5700 | 8.7369 | 8.1604 | 93.4018 | |
| 2019 | 2.5700 | 6.1669 | 5.8701 | 95.1869 | |
| 2020 | 2.5700 | 3.5969 | 3.4868 | 96.9378 | |
| 2021 and later years | 2.5700 | 1.0269 | 1.0067 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.0919 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Reinsurance — Nonproportional Assumed Property | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 12.9458 | 12.9458 | 87.0542 | 80.8403 | 92.8620 |
| 2009 | 60.1796 | 47.2338 | 39.8204 | 35.9393 | 90.2535 |
| 2010 | 80.8225 | 20.6429 | 19.1775 | 16.3406 | 85.2075 |
| 2011 | 84.9430 | 4.1205 | 15.0570 | 12.8008 | 85.0155 |
| 2012 | 85.6680 | 0.7250 | 14.3320 | 12.5809 | 87.7821 |
| 2013 | 80.0452 | -5.6229 | 19.9548 | 18.8276 | 94.3509 |
| 2014 | 86.7013 | 6.6561 | 13.2987 | 12.8020 | 96.2654 |
| 2015 | 97.2533 | 10.5520 | 2.7467 | 2.5578 | 93.1205 |
| 2016 | 97.6721 | 0.4188 | 2.3279 | 2.2344 | 95.9820 |
| 2017 | 98.8078 | 1.1357 | 1.1922 | 1.1665 | 97.8487 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | 1.1357 | 0.0564 | 0.0553 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.5477 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Reinsurance — Nonproportional Assumed Liability | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 32.5917 | 32.5917 | 67.4083 | 54.5146 | 80.8723 |
| 2009 | 33.3995 | 0.8078 | 66.6005 | 55.9039 | 83.9392 |
| 2010 | 35.4948 | 2.0953 | 64.5052 | 56.0362 | 86.8708 |
| 2011 | 44.0321 | 8.5373 | 55.9679 | 49.6024 | 88.6265 |
| 2012 | 64.8299 | 20.7979 | 35.1701 | 30.4004 | 86.4383 |
| 2013 | 66.4358 | 1.6059 | 33.5642 | 29.9965 | 89.3706 |
| 2014 | 77.8097 | 11.3738 | 22.1903 | 19.6119 | 88.3805 |
| 2015 | 82.4438 | 4.6341 | 17.5562 | 15.6809 | 89.3183 |
| 2016 | 84.1944 | 1.7507 | 15.8056 | 14.5317 | 91.9406 |
| 2017 | 87.9223 | 3.7279 | 12.0777 | 11.3189 | 93.7176 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 3.7279 | 8.3498 | 7.9757 | 95.5191 | |
| 2019 | 3.7279 | 4.6219 | 4.4967 | 97.2900 | |
| 2020 and later years | 3.7279 | 0.8940 | 0.8764 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.6662 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Reinsurance — Nonproportional Assumed Financial Lines | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 8.4783 | 8.4783 | 91.5217 | 82.6377 | 90.2930 |
| 2009 | 28.0475 | 19.5693 | 71.9525 | 66.0302 | 91.7692 |
| 2010 | 60.4351 | 32.3875 | 39.5649 | 35.6726 | 90.1622 |
| 2011 | 82.4448 | 22.0097 | 17.5552 | 14.6688 | 83.5583 |
| 2012 | 90.2720 | 7.8271 | 9.7280 | 7.2799 | 74.8343 |
| 2013 | 85.3168 | -4.9551 | 14.6831 | 12.6301 | 86.0181 |
| 2014 | 88.3777 | 3.0608 | 11.6223 | 10.0206 | 86.2186 |
| 2015 | 89.9934 | 1.6157 | 10.0066 | 8.7793 | 87.7346 |
| 2016 | 81.6664 | -8.3269 | 18.3336 | 17.6300 | 96.1625 |
| 2017 | 91.0491 | 9.3827 | 8.9509 | 8.7745 | 98.0298 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 and later years | — | — | — | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.5352 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
| Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Burglary and Theft) | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 44.5756 | 44.5756 | 55.4244 | 53.5639 | 96.6430 |
| 2009 | 88.4263 | 41.8507 | 13.5737 | 13.0467 | 96.1174 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2010 and later years | 6.7869 | 6.7869 | 6.6531 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2010 taxable year. | |||||
| Workers’ Compensation | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2008 | 19.0410 | 19.0410 | 80.9590 | 69.6415 | 86.0207 |
| 2009 | 40.2442 | 21.2032 | 59.7558 | 50.8396 | 85.0789 |
| 2010 | 57.1497 | 16.9055 | 42.8503 | 35.6584 | 83.2162 |
| 2011 | 67.8601 | 10.7104 | 32.1399 | 26.1804 | 81.4579 |
| 2012 | 75.5399 | 7.6797 | 24.4601 | 19.4093 | 79.3507 |
| 2013 | 80.1157 | 4.5758 | 19.8843 | 15.5296 | 78.0994 |
| 2014 | 82.1828 | 2.0672 | 17.8172 | 14.0513 | 78.8640 |
| 2015 | 84.4045 | 2.2217 | 15.5955 | 12.3555 | 79.2248 |
| 2016 | 85.5195 | 1.1150 | 14.4805 | 11.7198 | 80.9346 |
| 2017 | 86.2855 | 0.7661 | 13.7145 | 11.4141 | 83.2269 |
| Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2018 | 0.7661 | 12.9484 | 11.0961 | 85.6945 | |
| 2019 | 0.7661 | 12.1823 | 10.7651 | 88.3666 | |
| 2020 | 0.7661 | 11.4163 | 10.4207 | 91.2795 | |
| 2021 | 0.7661 | 10.6502 | 10.0624 | 94.4802 | |
| 2022 and later years | 0.7661 | 9.8842 | 9.6894 | 98.0298 | |
| Taxpayers that use the composite method of Notice 88-100 should use 88.0210 percent to discount unpaid losses incurred in this line of business in 2008 and prior years and that are outstanding at the end of the 2018 taxable year. | |||||
Rev. Proc. 2007-9 and Rev. Proc. 2008-10 are modified as to the composite discount factor to be used by taxpayers that use the composite method of Notice 88-100 under the Composite and International (Composite) lines of business.
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.