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IRS Issues Loss Payment Patterns, Discount Factors For 2007.

DEC. 18, 2007

Rev. Proc. 2008-10; 2008-3 I.R.B. 290

DATED DEC. 18, 2007
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Cross-Reference
    Part III

    Administrative, Procedural, and Miscellaneous

    26 CFR 601.201: Rulings and determination letters.

    (Also Part 1, Section 846; 1.846-1.)
  • Code Sections
  • Subject Areas/Tax Topics
  • Industry Groups
    Insurance
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2007-27664
  • Tax Analysts Electronic Citation
    2007 TNT 244-15
Citations: Rev. Proc. 2008-10; 2008-3 I.R.B. 290

Modified by Rev. Proc. 2008-70

Rev. Proc. 2008-10

SECTION 1. PURPOSE

This revenue procedure prescribes the loss payment patterns and discount factors for the 2007 determination year. These factors will be used to compute discounted unpaid losses under § 846 of the Internal Revenue Code.

SEC. 2. BACKGROUND

.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 fire 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 2007 determination year that, pursuant to § 846(d)(1), must be applied through the 2011 accident year.

.03 The loss payment patterns for the 2007 determination year are based on the aggregate loss payment information reported on the 2005 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) Lines of Business. The lines of business for the 2007 determination year are the same as the lines of business for the 2002 determination year. See Rev. Proc. 2003-17, 2003-1 C.B. 427

(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.

(4) Smoothing Data. In Rev. Proc. 2003-17, section 2.03(4), comments were requested 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 revenue procedure does not adopt such a methodology with respect to the 2007 determination year.

SEC. 3. SCOPE

This revenue procedure applies to any taxpayer that is required to discount unpaid losses under § 846 for a line of business using the discount factors published by the Secretary.

SEC. 4. TABLES OF DISCOUNT FACTORS

.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2007. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2007, 3.97 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 2007 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 98.0722 percent to discount unpaid losses incurred in this line of business in the 2007 accident year and that are outstanding at the end of the 2007 and later taxable years.

Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2007 taxable year.

Auto Physical Damage

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007     89.4096      89.4096     10.5904       10.3687       97.9072

 

 2008     99.6848      10.2752     0.3152         0.3032       96.1998

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2009 and later years     0.1576    0.1576   0.1546   98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.

Commercial Auto/Truck Liability/Medical

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      23.6718      23.6718      76.3282     70.3185      92.1265

 

 2008      47.5425      23.8708      52.4575     48.7701      92.9709

 

 2009      66.6847      19.1421      33.3153     31.1879      93.6143

 

 2010      81.5105      14.8258      18.4895     17.3088      93.6143

 

 2011      90.0548       8.5443       9.9452      9.2837      93.3488

 

 2012      94.7311       4.6763       5.2689      4.8841      92.6963

 

 2013      97.0602       2.3292       2.9398      2.7031      91.9480

 

 2014      98.1174       1.0572       1.8826      1.7324      92.0225

 

 2015      98.8692       0.7518       1.1308      1.0346      91.4939

 

 2016      99.1160       0.2467       0.8840      0.8241      93.2174

 

 

Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2006 accident year and that are outstanding at the end of the tax year shown.

 2017                    0.2467         0.6373          0.6052      94.9641

 

 2018                    0.2467         0.3906          0.3777      96.6929

 

 2019 and later years    0.2467         0.1439          0.1411      98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 95.5650 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Composite

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      34.7004     34.7004      65.2996        59.3989      90.9638

 

 2008      58.6076     23.9072      41.3924        37.3799      90.3063

 

 2009      71.7608     13.1532      28.2392        25.4522      90.1307

 

 2010      81.4987      9.7379      18.5013        16.5333      89.3631

 

 2011      87.8488      6.3501      12.1512        10.7148      88.1789

 

 2012      91.4226      3.5739       8.5774         7.4961      87.3938

 

 2013      93.4057      1.9831       6.5943         5.7716      87.5245

 

 2014      94.2280      0.8222       5.7720         5.1623      89.4370

 

 2015      95.4875      1.2595       4.5125         4.0830      90.4817

 

 2016      96.3560      0.8685       3.6440         3.3595      92.1928

 

 

Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2006 accident year and that are outstanding at the end of the tax year shown.

 2017                      0.8685      2.7754           2.6072        93.9399

 

 2018                      0.8685      1.9069           1.8251        95.7124

 

 2019                      0.8685      1.0383           1.0120        97.4599

 

 2020 and later years      0.8685      0.1698           0.1665        98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 91.0440 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Fidelity/Surety

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      25.2328      25.2328      74.7672       71.1687      95.1871

 

 2008      61.1025      35.8698      38.8975       37.4193      96.1998

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2009 and later years     19.4487   19.4487   19.0738  98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.

Financial Guaranty/Mortgage Guaranty

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      7.7824        7.7824    92.2175       88.3402       95.7954

 

 2008     62.1390       54.3565    37.8610       36.4222       96.1998

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2009 and later years    18.9305    18.9305   18.5656    98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.

International (Composite)

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      34.7004      34.7004      65.2996      59.3989      90.9638

 

 2008      58.6076      23.9072      41.3924      37.3799      90.3063

 

 2009      71.7608      13.1532      28.2392      25.4522      90.1307

 

 2010      81.4987       9.7379      18.5013      16.5333      89.3631

 

 2011      87.8488       6.3501      12.1512      10.7148      88.1789

 

 2012      91.4226       3.5739       8.5774       7.4961      87.3938

 

 2013      93.4057       1.9831       6.5943       5.7716      87.5245

 

 2014      94.2280       0.8222       5.7720       5.1623      89.4370

 

 2015      95.4875       1.2595       4.5125       4.0830      90.4817

 

 2016      96.3560       0.8685       3.6440       3.3595      92.1928

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      0.8685      2.7754           2.6072        93.9399

 

 2018                      0.8685      1.9069           1.8251        95.7124

 

 2019                      0.8685      1.0383           1.0120        97.4599

 

 2020 and later years      0.8685      0.1698           0.1665        98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 91.0440 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Medical Malpractice -- Claims-Made

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007       4.9425       4.9425    95.0575        85.2278      89.6591

 

 2008      19.9369      14.9944    80.0631        73.3222      91.5804

 

 2009      44.3489      24.4120    55.6511        51.3411      92.2554

 

 2010      64.8374      20.4885    35.1626        32.4882      92.3941

 

 2011      80.2530      15.4156    19.7470        18.0593      91.4535

 

 2012      85.7907       5.5377    14.2093        13.1297      92.4024

 

 2013      91.2722       5.4815     8.7278         8.0618      92.3685

 

 2014      93.3314       2.0593     6.6686         6.2821      94.2043

 

 2015      96.1257       2.7942     3.8743         3.6823      95.0438

 

 2016      97.6538       1.5281     2.3462         2.2704      96.7663

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017 and later years     1.5281    0.8182    0.8024   98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 97.4255 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Medical Malpractice -- Occurrence

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007       1.5878       1.5878     98.4122       82.4895      83.8204

 

 2008       4.4720       2.8842     95.5280       82.8234      86.7006

 

 2009      17.7738      13.3018     82.2262       72.5482      88.2300

 

 2010      35.8814      18.1076     64.1186       56.9648      88.8429

 

 2011      52.9447      17.0633     47.0553       41.8276      88.8904

 

 2012      68.4348      15.4901     31.5652       27.6936      87.7346

 

 2013      79.5616      11.1268     20.4384       17.4475      85.3663

 

 2014      85.8198       6.2582     14.1802       11.7590      82.9253

 

 2015      90.1267       4.3069      9.8733        7.8342      79.3476

 

 2016      90.3701       0.2434      9.6299        7.8971      82.0057

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      0.2434         9.3865      7.9624      84.8282

 

 2018                      0.2434         9.1431      8.0304      87.8294

 

 2019                      0.2434         8.8998      8.1010      91.0250

 

 2020                      0.2434         8.6564      8.1745      94.4327

 

 2021 and later years      0.2434         8.4130      8.2508      98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 84.8282 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Miscellaneous Casualty

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007     72.9064      72.9064     27.0936      26.2154       96.7589

 

 2008     93.5836      20.6771      6.4164       6.1726       96.1998

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2009 and later years     3.2082    3.2082     3.1464  98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.

Multiple Peril Lines (Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability (Ocean Marine, Aircraft (All Perils), Boiler and Machinery))

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007     52.5880       52.5880     47.4120       44.3168       93.4716

 

 2008     80.0449       27.4570     19.9551       18.0795       90.6009

 

 2009     86.1625        6.1175     13.8375       12.5595       90.7636

 

 2010     90.7452        4.5827      9.2548        8.3853       90.6043

 

 2011     93.9006        3.1555      6.0994        5.5007       90.1844

 

 2012     95.7613        1.8607      4.2387        3.8218       90.1647

 

 2013     96.8755        1.1141      3.1245        2.8375       90.8127

 

 2014     97.6715        0.7960      2.3285        2.1385       91.8377

 

 2015     98.0329        0.3615      1.9671        1.8548       94.2925

 

 2016     98.6810        0.6481      1.3190        1.2676       96.1051

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      0.6481       0.6709           0.6571       97.9448

 

 2018 and later years      0.6481       0.0228           0.0224       98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 97.9855 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Other (Including Credit)

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      67.9528      67.9528    32.0472       30.8449      96.2484

 

 2008      89.4609      21.5081    10.5391       10.1386      96.1998

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2009 and later years       5.2695       5.2695    5.1680  98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.

Other Liability -- Claims-Made

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      5.8796        5.8796     94.1204       83.4520       88.6652

 

 2008     18.8735       12.9938     81.1265       73.5158       90.6186

 

 2009     41.6840       22.8105     58.3160       53.1755       91.1850

 

 2010     62.5322       20.8483     37.4678       34.0284       90.8206

 

 2011     73.5207       10.9885     26.4793       24.1749       91.2974

 

 2012     82.0036        8.4829     17.9964       16.4850       91.6017

 

 2013     88.6279        6.6244     11.3721       10.3849       91.3196

 

 2014     90.7107        2.0828      9.2893        8.6735       93.3708

 

 2015     94.8439        4.1332      5.1561        4.8034       93.1593

 

 2016     96.2689        1.4249      3.7311        3.5411       94.9069

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      1.4249          2.3062       2.2287       96.6413

 

 2018 and later years      1.4249          0.8812       0.8642       98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 96.1717 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Other Liability -- Occurrence

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007     13.6594       13.6594     86.3406     74.7852       86.6165

 

 2008     24.8389       11.1795     75.1611     66.3549       88.2836

 

 2009     41.7792       16.9403     58.2208     51.7160       88.8273

 

 2010     58.4995       16.7203     41.5005     36.7201       88.4811

 

 2011     69.5197       11.0203     30.4803     26.9411       88.3885

 

 2012     77.7513        8.2316     22.2487     19.6172       88.1725

 

 2013     84.2243        6.4730     15.7757     13.7958       87.4497

 

 2014     83.2275       -0.9968     16.7725     15.3599       91.5778

 

 2015     88.8524        5.6249     11.1476     10.2342       91.8064

 

 2016     91.3852        2.5328      8.6148      8.0579       93.5358

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                    2.5328         6.0820         5.7952       95.2850

 

 2018                    2.5328         3.5492         3.4427       96.9998

 

 2019 and later years    2.5328         1.0164         0.9968       98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 92.8572 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Private Passenger Auto Liability/Medical

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      42.6108     42.6108    57.3892       54.1196      94.3029

 

 2008      71.5827     28.9719    28.4173       26.7268      94.0513

 

 2009      84.6947     13.1120    15.3053       14.4182      94.2036

 

 2010      92.3556      7.6610     7.6444        7.1790      93.9125

 

 2011      96.2369      3.8812     3.7631        3.5065      93.1803

 

 2012      97.9275      1.6907     2.0725        1.9218      92.7305

 

 2013      98.7719      0.8444     1.2281        1.1371      92.5934

 

 2014      99.2692      0.4973     0.7308        0.6752      92.3927

 

 2015      99.5053      0.2361     0.4947        0.4613      93.2429

 

 2016      99.6440      0.1387     0.3560        0.3382      94.9893

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      0.1387          0.2174         0.2102       96.7159

 

 2018 and later years      0.1387          0.0787         0.0772       98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 97.0832 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Products Liability -- Claims-Made

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007       1.0259      1.0259      98.9741       84.0703      84.9417

 

 2008      11.7927     10.7667      88.2073       76.4295      86.6475

 

 2009      29.3642     17.5716      70.6358       61.5467      87.1325

 

 2010      55.1655     25.8012      44.8345       37.6817      84.0462

 

 2011      83.4171     28.2516      16.5829       10.3708      62.5388

 

 2012      64.8933    -18.5238      35.1067       29.6704      84.5149

 

 2013      82.3346     17.4414      17.6654       13.0641      73.9533

 

 2014      86.3986      4.0640      13.6014        9.4389      69.3965

 

 2015      76.3310    -10.0676      23.6690       20.0791      84.8330

 

 2016      78.7910      2.4600      21.2090       18.3679      86.6043

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      2.4600         18.7490     16.5888         88.4781

 

 2018                      2.4600         16.2890     14.7390         90.4843

 

 2019                      2.4600         13.8290     12.8158         92.6732

 

 2020                      2.4600         11.3691     10.8163         95.1377

 

 2021 and later years      2.4600          8.9091      8.7373         98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 88.4781 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Products Liability -- Occurrence

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      5.0466      5.0466       94.9534     80.4479       84.7236

 

 2008     13.6935      8.6469       86.3065     74.8249       86.6967

 

 2009     28.2541     14.5606       71.7459     62.9486       87.7383

 

 2010     41.3083     13.0542       58.6917     52.1369       88.8318

 

 2011     59.3693     18.0610       40.6307     35.7907       88.0878

 

 2012     73.0717     13.7024       26.9283     23.2398       86.3026

 

 2013     74.6612      1.5895       25.3388     22.5417       88.9612

 

 2014     78.9833      4.3221       21.0167     19.0296       90.5449

 

 2015     86.1231      7.1398       13.8769     12.5049       90.1129

 

 2016     88.6931      2.5700       11.3069     10.3808       91.8095

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      2.5700          8.7369      8.1724       93.5389

 

 2018                      2.5700          6.1669      5.8763       95.2882

 

 2019                      2.5700          3.5969      3.4891       97.0031

 

 2020 and later years      2.5700          1.0269      1.0071       98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 92.1824 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Reinsurance -- Nonproportional Assumed Property

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at     Discount

 

 Tax Year  Paid       Each Year   Year End     Year End      Factors

 

            (%)           (%)        (%)          (%)          (%)

 

 

 2007      12.9458     12.9458      87.0542     80.9635      93.0035

 

 2008      60.1796     47.2338      39.8204     36.0155      90.4447

 

 2009      80.8225     20.6429      19.1775     16.3966      85.4991

 

 2010      84.9430      4.1205      15.0570     12.8460      85.3161

 

 2011      85.6680      0.7250      14.3320     12.6167      88.0322

 

 2012      80.0452     -5.6229      19.9548     18.8510      94.4685

 

 2013      86.7013      6.6561      13.2987     12.8124      96.3436

 

 2014      97.2533     10.5520       2.7467      2.5617      93.2640

 

 2015      97.6721      0.4188       2.3279      2.2363      96.0671

 

 2016      98.8078      1.1357       1.1922      1.1671      97.8949

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017 and later years     1.1357  0.0564  0.0553  98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 92.7876 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Reinsurance -- Nonproportional Assumed Liability

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007     32.5917       32.5917    67.4083        54.7592       81.2352

 

 2008     33.3995        0.8078    66.6005        56.1095       84.2479

 

 2009     35.4948        2.0953    64.5052        56.2006       87.1256

 

 2010     44.0321        8.5373    55.9679        49.7267       88.8485

 

 2011     64.8299       20.7979    35.1701        30.4941       86.7047

 

 2012     66.4358        1.6059    33.5642        30.0673       89.5814

 

 2013     77.8097       11.3738    22.1903        19.6635       88.6130

 

 2014     82.4438        4.6341    17.5562        15.7190       89.5350

 

 2015     84.1944        1.7507    15.8056        14.5579       92.1064

 

 2016     87.9223        3.7279    12.0777        11.3347       93.8485

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      3.7279          8.3498        7.9835       95.6137

 

 2018                      3.7279          4.6219        4.4993       97.3478

 

 2019 and later years      3.7279          0.8940        0.8768       98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 92.6803 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Reinsurance -- Nonproportional Assumed Financial Lines

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007       8.4783      8.4783     91.5217       82.8118      90.4832

 

 2008      28.0475     19.5693     71.9525       66.1455      91.9295

 

 2009      60.4351     32.3875     39.5649       35.7473      90.3510

 

 2010      82.4448     22.0097     17.5552       14.7241      83.8733

 

 2011      90.2720      7.8271      9.7280        7.3277      75.3251

 

 2012      85.3168     -4.9551     14.6831       12.6710      86.2966

 

 2013      88.3777      3.0608     11.6223       10.0531      86.4983

 

 2014      89.9934      1.6157     10.0066        8.8048      87.9894

 

 2015      81.6664     -8.3269     18.3336       17.6449      96.2439

 

 2016      91.0491      9.3827      8.9509        8.7783      98.0722

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017 and later years     -         -         -      98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 92.7966 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Burglary and Theft)

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      44.5756     44.5756     55.4244      53.6032      96.7140

 

 2008      88.4263     41.8507     13.5737      13.0579      96.1998

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2009 and later years     6.7869  6.7869  6.6560  98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 98.0722 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2009 taxable year.

Workers' Compensation

 Estimated                           Discounted

 

           Cumulative Estimated   Unpaid       Unpaid

 

           Losses     Losses Paid Losses at    Losses at      Discount

 

 Tax Year  Paid       Each Year   Year End     Year End       Factors

 

            (%)           (%)        (%)          (%)            (%)

 

 

 2007      19.0410     19.0410     80.9590       69.8486      86.2765

 

 2008      40.2442     21.2032     59.7558       51.0015      85.3500

 

 2009      57.1497     16.9055     42.8503       35.7885      83.5198

 

 2010      67.8601     10.7104     32.1399       26.2883      81.7936

 

 2011      75.5399      7.6797     24.4601       19.5013      79.7269

 

 2012      80.1157      4.5758     19.8843       15.6098      78.5028

 

 2013      82.1828      2.0672     17.8172       14.1216      79.2587

 

 2014      84.4045      2.2217     15.5955       12.4169      79.6188

 

 2015      85.5195      1.1150     14.4805       11.7730      81.3024

 

 2016      86.2855      0.7661     13.7145       11.4593      83.5562

 

 

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 2007 accident year and that are outstanding at the end of the tax year shown.

 2017                      0.7661         12.9484     11.1331        85.9805

 

 2018                      0.7661         12.1823     10.7940        88.6033

 

 2019                      0.7661         11.4163     10.4414        91.4603

 

 2020                      0.7661         10.6502     10.0748        94.5968

 

 2021 and later years      0.7661          9.8842      9.6936        98.0722

 

 

Taxpayers that use the composite method of Notice 88-100 should use 89.5536 percent to discount unpaid losses incurred in this line of business in 2007 and prior years and that are outstanding at the end of the 2017 taxable year.

DRAFTING INFORMATION

The principal author of this revenue procedure is Katherine A. Hossofsky of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Hossofsky at (202) 622-8435 (not a toll-free call).

DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Cross-Reference
    Part III

    Administrative, Procedural, and Miscellaneous

    26 CFR 601.201: Rulings and determination letters.

    (Also Part 1, Section 846; 1.846-1.)
  • Code Sections
  • Subject Areas/Tax Topics
  • Industry Groups
    Insurance
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2007-27664
  • Tax Analysts Electronic Citation
    2007 TNT 244-15
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