This revenue procedure prescribes the loss payment patterns and discount factors for the 2005 accident year. These factors will be used for computing discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2003-17, 2003-1 C.B. 427, for background concerning the loss payment patterns and application of the discount factors.
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 The following tables present separately for each line of business the discount factors under § 846 for accident year 2005. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2005, which is 4.44 percent, and by assuming all loss payments occur in the middle of the calendar year.
.02 If the groupings of individual lines of business on the annual statement change, taxpayers must discount the unpaid losses on the affected lines of business in accordance with the discounting patterns that would have applied to those unpaid losses based on their classification on the 2000 annual statement. See Rev. Proc. 2003-17, 2003-1 C.B. 427, section 2, for additional background on discounting under section 846 and the use of the Secretary’s tables.
.03 Section V of Notice 88-100, 1988-2 C.B. 439, sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. The tables separately provide discount factors for taxpayers who elect to use the composite method of section V of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. 980.
.04 Section 2.03(4) of Rev. Proc. 2003-17 requested comments as to whether a methodology should be adopted to smooth the raw payment data and thus produce a more stable pattern of discount factors. This issue will be addressed in the new determination year, which is 2007. Accordingly, taxpayers may still submit comments that should include a reference to Rev. Proc. 2005-72 on this issue to the following address:
CC:PA:LPD:PR (Rev. Proc. 2005-72), room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Comments may be hand delivered between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD (Rev. Proc. 2005-72), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Alternatively, e-mail comments to Notice.Comments@irscounsel.treas.gov. All comments will be available for public inspection and copying.
.05 Tables.
| Tables of Factors to be Used to Discount Unpaid Losses Incurred in Accident Year 2005 |
|---|
| (Interest rate: 4.44 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 97.8513 percent to discount unpaid losses incurred in this line of business in the 2005 accident year and that are outstanding at the end of the 2005 and later taxable years. |
| Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2005 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 (%) |
| 2005 | 89.6468 | 89.6468 | 10.3532 | 10.1113 | 97.6638 |
| 2006 | 99.6845 | 10.0377 | 0.3155 | 0.3022 | 95.7713 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2007 and later years | 0.1578 | 0.1578 | 0.1544 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 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 (%) |
| 2005 | 28.8244 | 28.8244 | 71.1756 | 65.3965 | 91.8806 |
| 2006 | 54.9871 | 26.1626 | 45.0129 | 41.5630 | 92.3357 |
| 2007 | 72.8039 | 17.8168 | 27.1961 | 25.2004 | 92.6616 |
| 2008 | 85.0572 | 12.2533 | 14.9428 | 13.7969 | 92.3312 |
| 2009 | 91.6276 | 6.5704 | 8.3724 | 7.6948 | 91.9064 |
| 2010 | 94.9514 | 3.3239 | 5.0486 | 4.6396 | 91.8992 |
| 2011 | 97.0453 | 2.0938 | 2.9547 | 2.7058 | 91.5744 |
| 2012 | 98.1574 | 1.1121 | 1.8426 | 1.6894 | 91.6838 |
| 2013 | 98.7370 | 0.5796 | 1.2630 | 1.1721 | 92.7985 |
| 2014 | 99.1070 | 0.3700 | 0.8930 | 0.8460 | 94.7324 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 0.3700 | 0.5230 | 0.5054 | 96.6342 | |
| 2016 and later years | 0.3700 | 0.1530 | 0.1497 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 96.8695 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 40.9985 | 40.9985 | 59.0015 | 53.2420 | 90.2384 |
| 2006 | 65.8439 | 24.8454 | 34.1561 | 30.2149 | 88.4613 |
| 2007 | 77.5023 | 11.6583 | 22.4977 | 19.6421 | 87.3071 |
| 2008 | 84.6221 | 7.1198 | 15.3779 | 13.2380 | 86.0849 |
| 2009 | 90.2455 | 5.6234 | 9.7545 | 8.0789 | 82.8227 |
| 2010 | 92.2780 | 2.0325 | 7.7220 | 6.3605 | 82.3688 |
| 2011 | 94.3974 | 2.1195 | 5.6026 | 4.4769 | 79.9089 |
| 2012 | 95.2526 | 0.8552 | 4.7474 | 3.8017 | 80.0811 |
| 2013 | 96.2792 | 1.0266 | 3.7208 | 2.9214 | 78.5162 |
| 2014 | 96.4323 | 0.1531 | 3.5677 | 2.8946 | 81.1355 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 0.1531 | 3.4145 | 2.8667 | 83.9550 | |
| 2016 | 0.1531 | 3.2614 | 2.8374 | 87.0012 | |
| 2017 | 0.1531 | 3.1083 | 2.8069 | 90.3057 | |
| 2018 | 0.1531 | 2.9551 | 2.7751 | 93.9070 | |
| 2019 and later years | 0.1531 | 2.8020 | 2.7418 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 88.8907 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 38.3328 | 38.3328 | 61.6672 | 57.8107 | 93.7463 |
| 2006 | 58.8485 | 20.5156 | 41.1515 | 39.4114 | 95.7713 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2007 and later years | 20.5758 | 20.5758 | 20.1336 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 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 (%) |
| 2005 | 4.0723 | 4.0723 | 95.9277 | 90.2226 | 94.0527 |
| 2006 | 40.7639 | 36.6916 | 59.2361 | 56.7312 | 95.7713 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2007 and later years | 29.6180 | 29.6180 | 28.9816 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 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 (%) |
| 2005 | 40.9985 | 40.9985 | 59.0015 | 53.2420 | 90.2384 |
| 2006 | 65.8439 | 24.8454 | 34.1561 | 30.2149 | 88.4613 |
| 2007 | 77.5023 | 11.6583 | 22.4977 | 19.6421 | 87.3071 |
| 2008 | 84.6221 | 7.1198 | 15.3779 | 13.2380 | 86.0849 |
| 2009 | 90.2455 | 5.6234 | 9.7545 | 8.0789 | 82.8227 |
| 2010 | 92.2780 | 2.0325 | 7.7220 | 6.3605 | 82.3688 |
| 2011 | 94.3974 | 2.1195 | 5.6026 | 4.4769 | 79.9089 |
| 2012 | 95.2526 | 0.8552 | 4.7474 | 3.8017 | 80.0811 |
| 2013 | 96.2792 | 1.0266 | 3.7208 | 2.9214 | 78.5162 |
| 2014 | 96.4323 | 0.1531 | 3.5677 | 2.8946 | 81.1355 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 0.1531 | 3.4145 | 2.8667 | 83.9550 | |
| 2016 | 0.1531 | 3.2614 | 2.8374 | 87.0012 | |
| 2017 | 0.1531 | 3.1083 | 2.8069 | 90.3057 | |
| 2018 | 0.1531 | 2.9551 | 2.7751 | 93.9070 | |
| 2019 and later | 0.1531 | 2.8020 | 2.7418 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 88.8907 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 7.3447 | 7.3447 | 92.6553 | 82.5239 | 89.0655 |
| 2006 | 29.0191 | 21.6744 | 70.9809 | 64.0376 | 90.2180 |
| 2007 | 53.3108 | 24.2917 | 46.6892 | 42.0557 | 90.0759 |
| 2008 | 69.1517 | 15.8409 | 30.8483 | 27.7343 | 89.9053 |
| 2009 | 82.0981 | 12.9464 | 17.9019 | 15.7350 | 87.8955 |
| 2010 | 86.3995 | 4.3014 | 13.6005 | 12.0377 | 88.5095 |
| 2011 | 89.7111 | 3.3116 | 10.2889 | 9.1879 | 89.2991 |
| 2012 | 92.4688 | 2.7577 | 7.5312 | 6.7776 | 89.9934 |
| 2013 | 94.5163 | 2.0475 | 5.4837 | 4.9860 | 90.9248 |
| 2014 | 95.7635 | 1.2471 | 4.2365 | 3.9329 | 92.8323 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 1.2471 | 2.9894 | 2.8330 | 94.7672 | |
| 2016 | 1.2471 | 1.7422 | 1.6842 | 96.6692 | |
| 2017 and later years | 1.2471 | 0.4951 | 0.4845 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 95.5661 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 0.8316 | 0.8316 | 99.1684 | 83.1082 | 83.8051 |
| 2006 | 7.4573 | 6.6257 | 92.5427 | 80.0270 | 86.4758 |
| 2007 | 23.5575 | 16.1002 | 76.4425 | 67.1265 | 87.8130 |
| 2008 | 41.0062 | 17.4487 | 58.9938 | 52.2751 | 88.6111 |
| 2009 | 55.5832 | 14.5770 | 44.4168 | 39.6990 | 89.3782 |
| 2010 | 68.9413 | 13.3581 | 31.0587 | 27.8102 | 89.5407 |
| 2011 | 78.2095 | 9.2682 | 21.7905 | 19.5732 | 89.8245 |
| 2012 | 82.8727 | 4.6632 | 17.1273 | 15.6766 | 91.5303 |
| 2013 | 86.3178 | 3.4451 | 13.6822 | 12.8519 | 93.9319 |
| 2014 | 91.0834 | 4.7656 | 8.9166 | 8.5523 | 95.9147 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 and later years | 4.7656 | 4.1510 | 4.0618 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 79.7790 | 79.7790 | 20.2210 | 19.4754 | 96.3125 |
| 2006 | 94.9417 | 15.1627 | 5.0583 | 4.8444 | 95.7713 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2007 and later years | 2.5292 | 2.5292 | 2.4748 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 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 (%) |
| 2005 | 59.7445 | 59.7445 | 40.2555 | 37.1445 | 92.2719 |
| 2006 | 81.0347 | 21.2902 | 18.9653 | 17.0360 | 89.8274 |
| 2007 | 87.3325 | 6.2978 | 12.6675 | 11.3563 | 89.6494 |
| 2008 | 91.0659 | 3.7334 | 8.9341 | 8.0452 | 90.0503 |
| 2009 | 95.1781 | 4.1122 | 4.8219 | 4.1999 | 87.1002 |
| 2010 | 95.7605 | 0.5824 | 4.2395 | 3.7911 | 89.4249 |
| 2011 | 97.0539 | 1.2933 | 2.9461 | 2.6377 | 89.5320 |
| 2012 | 97.6441 | 0.5903 | 2.3559 | 2.1516 | 91.3303 |
| 2013 | 98.7037 | 1.0596 | 1.2963 | 1.1643 | 89.8184 |
| 2014 | 98.6217 | -0.0821 | 1.3783 | 1.2999 | 94.3059 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 0.5226 | 0.8558 | 0.8235 | 96.2318 | |
| 2016 and later years | 0.5226 | 0.3332 | 0.3260 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 96.6358 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 69.1729 | 69.1729 | 30.8271 | 29.6244 | 96.0986 |
| 2006 | 91.2168 | 22.0439 | 8.7832 | 8.4118 | 95.7713 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2007 and later years | 4.3916 | 4.3916 | 4.2973 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 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 (%) |
| 2005 | 14.9618 | 14.9618 | 85.0382 | 74.3656 | 87.4496 |
| 2006 | 36.2113 | 21.2494 | 63.7887 | 55.9513 | 87.7135 |
| 2007 | 54.2876 | 18.0763 | 45.7124 | 39.9623 | 87.4211 |
| 2008 | 64.2163 | 9.9288 | 35.7837 | 31.5899 | 88.2801 |
| 2009 | 73.2732 | 9.0569 | 26.7268 | 23.7367 | 88.8123 |
| 2010 | 80.5748 | 7.3016 | 19.4252 | 17.3286 | 89.2072 |
| 2011 | 87.6200 | 7.0452 | 12.3800 | 10.8982 | 88.0304 |
| 2012 | 89.9155 | 2.2955 | 10.0845 | 9.0361 | 89.6042 |
| 2013 | 93.3946 | 3.4791 | 6.6054 | 5.8818 | 89.0459 |
| 2014 | 94.6170 | 1.2223 | 5.3830 | 4.8938 | 90.9113 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 1.2223 | 4.1607 | 3.8619 | 92.8183 | |
| 2016 | 1.2223 | 2.9383 | 2.7841 | 94.7528 | |
| 2017 | 1.2223 | 1.7160 | 1.6586 | 96.6546 | |
| 2018 and later years | 1.2223 | 0.4936 | 0.4830 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 94.1292 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 19.1133 | 19.1133 | 80.8867 | 68.6311 | 84.8484 |
| 2006 | 36.4434 | 17.3301 | 63.5566 | 53.9677 | 84.9128 |
| 2007 | 52.1648 | 15.7215 | 47.8352 | 40.2972 | 84.2417 |
| 2008 | 63.2383 | 11.0734 | 36.7617 | 30.7698 | 83.7006 |
| 2009 | 72.0780 | 8.8397 | 27.9220 | 23.1021 | 82.7380 |
| 2010 | 75.9021 | 3.8241 | 24.0979 | 20.2198 | 83.9068 |
| 2011 | 82.9305 | 7.0284 | 17.0695 | 13.9348 | 81.6357 |
| 2012 | 85.1441 | 2.2136 | 14.8559 | 12.2913 | 82.7368 |
| 2013 | 89.3006 | 4.1565 | 10.6994 | 8.5893 | 80.2780 |
| 2014 | 89.9898 | 0.6892 | 10.0102 | 8.2663 | 82.5786 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 0.6892 | 9.3210 | 7.9290 | 85.0657 | |
| 2016 | 0.6892 | 8.6318 | 7.5767 | 87.7764 | |
| 2017 | 0.6892 | 7.9426 | 7.2087 | 90.7606 | |
| 2018 | 0.6892 | 7.2533 | 6.8244 | 94.0867 | |
| 2019 and later years | 0.6892 | 6.5641 | 6.4231 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 88.8152 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 43.1926 | 43.1926 | 56.8074 | 53.1786 | 93.6121 |
| 2006 | 72.2008 | 29.0082 | 27.7992 | 25.8946 | 93.1486 |
| 2007 | 84.5632 | 12.3625 | 15.4368 | 14.4104 | 93.3510 |
| 2008 | 91.9316 | 7.3684 | 8.0684 | 7.5200 | 93.2034 |
| 2009 | 95.8729 | 3.9413 | 4.1271 | 3.8261 | 92.7060 |
| 2010 | 97.7804 | 1.9075 | 2.2196 | 2.0465 | 92.2040 |
| 2011 | 98.7957 | 1.0153 | 1.2043 | 1.0999 | 91.3257 |
| 2012 | 99.2491 | 0.4535 | 0.7509 | 0.6853 | 91.2646 |
| 2013 | 99.5195 | 0.2703 | 0.4805 | 0.4394 | 91.4469 |
| 2014 | 99.6353 | 0.1159 | 0.3647 | 0.3405 | 93.3821 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 0.1159 | 0.2488 | 0.2373 | 95.3548 | |
| 2016 | 0.1159 | 0.1330 | 0.1294 | 97.3165 | |
| 2017 and later years | 0.1159 | 0.0171 | 0.0167 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 96.0257 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 6.5804 | 6.5804 | 93.4196 | 79.0050 | 84.5700 |
| 2006 | 26.7183 | 20.1379 | 73.2817 | 61.9327 | 84.5131 |
| 2007 | 43.1834 | 16.4652 | 56.8166 | 47.8558 | 84.2286 |
| 2008 | 43.9209 | 0.7375 | 56.0791 | 49.2269 | 87.7812 |
| 2009 | 54.3806 | 10.4597 | 45.6194 | 40.7232 | 89.2673 |
| 2010 | 78.3630 | 23.9824 | 21.6370 | 18.0223 | 83.2938 |
| 2011 | 82.8643 | 4.5013 | 17.1357 | 14.2223 | 82.9982 |
| 2012 | 68.2184 | -14.6459 | 31.7816 | 29.8213 | 93.8320 |
| 2013 | 79.1582 | 10.9399 | 20.8418 | 19.9653 | 95.7947 |
| 2014 | 89.6963 | 10.5381 | 10.3037 | 10.0823 | 97.8513 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 and later years | 97.8513 | ||||
| Taxpayers that use the composite method of Notice 88-100 should use 97.1286 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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 (%) |
| 2005 | 9.4198 | 9.4198 | 90.5802 | 75.2456 | 83.0707 |
| 2006 | 20.5845 | 11.1647 | 79.4155 | 67.1766 | 84.5888 |
| 2007 | 36.7807 | 16.1962 | 63.2193 | 53.6074 | 84.7959 |
| 2008 | 55.5974 | 18.8167 | 44.4026 | 36.7576 | 82.7827 |
| 2009 | 66.6238 | 11.0263 | 33.3762 | 27.1212 | 81.2591 |
| 2010 | 77.2636 | 10.6399 | 22.7364 | 17.4519 | 76.7576 |
| 2011 | 79.1888 | 1.9251 | 20.8112 | 16.2593 | 78.1278 |
| 2012 | 83.6816 | 4.4928 | 16.3184 | 12.3898 | 75.9253 |
| 2013 | 85.5507 | 1.8691 | 14.4493 | 11.0297 | 76.3341 |
| 2014 | 85.7291 | 0.1784 | 14.2709 | 11.3371 | 79.4424 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 0.1784 | 14.0925 | 11.6582 | 82.7263 | |
| 2016 | 0.1784 | 13.9141 | 11.9935 | 86.1968 | |
| 2017 | 0.1784 | 13.7357 | 12.3437 | 89.8658 | |
| 2018 | 0.1784 | 13.5573 | 12.7094 | 93.7461 | |
| 2019 and later years | 0.1784 | 13.3789 | 13.0914 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 86.9679 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year. | |||||
| Reinsurance A (Nonproportional Assumed Property) | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2005 | 25.0571 | 25.0571 | 74.9429 | 68.9700 | 92.0300 |
| 2006 | 52.0402 | 26.9831 | 47.9598 | 44.4567 | 92.6956 |
| 2007 | 82.4709 | 30.4307 | 17.5291 | 15.3316 | 87.4636 |
| 2008 | 85.6387 | 3.1678 | 14.3613 | 12.7749 | 88.9539 |
| 2009 | 92.7228 | 7.0840 | 7.2772 | 6.1025 | 83.8577 |
| 2010 | 91.8604 | -0.8624 | 8.1396 | 7.2548 | 89.1294 |
| 2011 | 96.5016 | 4.6412 | 3.4984 | 2.8338 | 81.0020 |
| 2012 | 96.1872 | -0.3143 | 3.8128 | 3.2809 | 86.0493 |
| 2013 | 97.6206 | 1.4333 | 2.3794 | 1.9617 | 82.4450 |
| 2014 | 97.8419 | 0.2214 | 2.1581 | 1.8226 | 84.4552 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 0.2214 | 1.9367 | 1.6773 | 86.6060 | |
| 2016 | 0.2214 | 1.7154 | 1.5256 | 88.9357 | |
| 2017 | 0.2214 | 1.4940 | 1.3671 | 91.5049 | |
| 2018 | 0.2214 | 1.2727 | 1.2016 | 94.4149 | |
| 2019 and later years | 0.2214 | 1.0513 | 1.0287 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 89.0524 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year. | |||||
| Reinsurance B (Nonproportional Assumed Liability) | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2005 | 8.9223 | 8.9223 | 91.0777 | 75.0085 | 82.3566 |
| 2006 | 27.3618 | 18.4395 | 72.6382 | 59.4945 | 81.9052 |
| 2007 | 44.5758 | 17.2140 | 55.4242 | 44.5440 | 80.3692 |
| 2008 | 53.8781 | 9.3023 | 46.1219 | 37.0152 | 80.2551 |
| 2009 | 60.8896 | 7.0115 | 39.1104 | 31.4932 | 80.5238 |
| 2010 | 69.7327 | 8.8430 | 30.2673 | 23.8542 | 78.8118 |
| 2011 | 76.6292 | 6.8965 | 23.3708 | 17.8654 | 76.4433 |
| 2012 | 79.4030 | 2.7738 | 20.5970 | 15.8239 | 76.8263 |
| 2013 | 83.8936 | 4.4906 | 16.1064 | 11.9373 | 74.1151 |
| 2014 | 80.1707 | -3.7229 | 19.8293 | 16.2719 | 82.0601 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 1.1805 | 18.6487 | 15.7879 | 84.6595 | |
| 2016 | 1.1805 | 17.4682 | 15.2825 | 87.4873 | |
| 2017 | 1.1805 | 16.2877 | 14.7546 | 90.5872 | |
| 2018 | 1.1805 | 15.1072 | 14.2032 | 94.0165 | |
| 2019 and later years | 1.1805 | 13.9266 | 13.6274 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 87.9189 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year. | |||||
| Reinsurance C (Nonproportional Assumed Financial Lines) | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2005 | 17.1195 | 17.1195 | 82.8805 | 73.7197 | 88.9470 |
| 2006 | 46.6590 | 29.5395 | 53.3410 | 46.8047 | 87.7462 |
| 2007 | 67.7135 | 21.0545 | 32.2865 | 27.3660 | 84.7599 |
| 2008 | 78.1379 | 10.4244 | 21.8621 | 17.9277 | 82.0037 |
| 2009 | 89.7346 | 11.5967 | 10.2654 | 6.8723 | 66.9470 |
| 2010 | 92.1268 | 2.3921 | 7.8732 | 4.7328 | 60.1128 |
| 2011 | 89.7323 | -2.3945 | 10.2677 | 7.3900 | 71.9733 |
| 2012 | 90.0460 | 0.3137 | 9.9540 | 7.3975 | 74.3171 |
| 2013 | 94.8867 | 4.8407 | 5.1133 | 2.7790 | 54.3481 |
| 2014 | 86.7041 | -8.1827 | 13.2959 | 11.2647 | 84.7228 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 1.4277 | 11.8683 | 10.3058 | 86.8351 | |
| 2016 | 1.4277 | 10.4406 | 9.3044 | 89.1173 | |
| 2017 | 1.4277 | 9.0129 | 8.2584 | 91.6292 | |
| 2018 | 1.4277 | 7.5852 | 7.1661 | 94.4744 | |
| 2019 and later years | 1.4277 | 6.1575 | 6.0252 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 89.1998 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 taxable year. | |||||
| Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Glass, Burglary and Theft) | |||||
|---|---|---|---|---|---|
| Tax Year | Estimated Cumulative Losses Paid (%) | Estimated Losses Paid Each Year (%) | Unpaid Losses at Year End (%) | Discounted Unpaid Losses at Year End (%) | Discount Factors (%) |
| 2005 | 62.9320 | 62.9320 | 37.0680 | 35.5638 | 95.9420 |
| 2006 | 88.4950 | 25.5631 | 11.5050 | 11.0185 | 95.7713 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2007 and later years | 5.7525 | 5.7525 | 5.6289 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 97.8513 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2007 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 (%) |
| 2005 | 28.2489 | 28.2489 | 71.7511 | 63.4995 | 88.4998 |
| 2006 | 57.8739 | 29.6249 | 42.1261 | 36.0435 | 85.5608 |
| 2007 | 71.2999 | 13.4260 | 28.7001 | 23.9229 | 83.3549 |
| 2008 | 77.7584 | 6.4585 | 22.2416 | 18.3848 | 82.6595 |
| 2009 | 81.9301 | 4.1717 | 18.0699 | 14.9378 | 82.6666 |
| 2010 | 83.7739 | 1.8437 | 16.2261 | 13.7168 | 84.5350 |
| 2011 | 86.5350 | 2.7611 | 13.4650 | 11.5040 | 85.4365 |
| 2012 | 88.4367 | 1.9017 | 11.5633 | 10.0714 | 87.0975 |
| 2013 | 89.5926 | 1.1559 | 10.4074 | 9.3372 | 89.7172 |
| 2014 | 91.6441 | 2.0515 | 8.3559 | 7.6553 | 91.6150 |
| 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 2005 accident year and that are outstanding at the end of the tax year shown. | |||||
| 2015 | 2.0515 | 6.3045 | 5.8987 | 93.5633 | |
| 2016 | 2.0515 | 4.2530 | 4.0641 | 95.5573 | |
| 2017 | 2.0515 | 2.2016 | 2.1480 | 97.5677 | |
| 2018 and later years | 2.0515 | 0.1501 | 0.1469 | 97.8513 | |
| Taxpayers that use the composite method of Notice 88-100 should use 95.7822 percent to discount unpaid losses incurred in this line of business in 2005 and prior years and that are outstanding at the end of the 2015 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.