IRS Issues Loss Payment Patterns, Discount Factors for 2012
Rev. Proc. 2012-44; 2012-49 I.R.B. 645
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2012-23153
- Tax Analysts Electronic Citation2012 TNT 219-19
Part III
Administrative, Procedural, and Miscellaneous
26 CFR 601.201: Rulings and determination letters.
(Also: Part I, Sections 846; 1.846-1.)
SECTION 1. PURPOSE
This revenue procedure prescribes the loss payment patterns and discount factors for the 2012 determination year. These factors will be used to compute discounted unpaid losses under § 846 of the Internal Revenue Code.
SECTION 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 property and casualty companies approved by the National Association of Insurance Commissioners (NAIC), except that the multiple peril lines shall be treated as a single line of business. Section 846(f)(5) states that the term "multiple peril lines" means the lines of business relating to farmowners multiple peril, homeowners multiple peril, commercial multiple peril, ocean marine, aircraft (all perils), and boiler and machinery.
.02 Pursuant to § 846(d), the Secretary has determined a loss payment pattern for each property and casualty line of business for the 2012 determination year that, pursuant to § 846(d)(1), must be applied through the 2016 accident year.
.03 The loss payment patterns for the 2012 determination year are based on the aggregate loss payment information reported on the 2010 annual statements of property and casualty insurance companies and compiled by A.M. Best and Co. The tables are arranged in alphabetical order. Following is an additional explanation of some of the tables and changes to the tables.
(1) NAIC Changes in Lines of Business. The NAIC has changed the reporting of unpaid loss experience on the annual statement for warranty companies. These changes are reflected in the lines of business set forth below.
(2) Format of the Tables. To simplify the tables, the columns entitled Tax Year provide the actual tax years, rather than AY+0, AY+1, and so on.
(3) Accident Years Not Separately Reported on the NAIC Annual Statement. Section V of Notice 88-100, 1988-2 C.B. 439, sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. The tables separately provide discount factors for taxpayers who elect to use the composite method of section V of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. 980.
SECTION 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.
SECTION 4. TABLES OF DISCOUNT FACTORS
.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2012. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2012, 2.89 percent, and by assuming all loss payments occur in the middle of the calendar year.
.02 If the groupings of individual lines of business on the annual statement change, taxpayers must discount unpaid losses on the resulting line of business in accordance with the discounting patterns that would have applied to those unpaid losses based on their classification on the 2012 annual statement.
.03 Tables.
Accident and Health (Other Than Disability Income or Credit Disability Insurance)
Taxpayers that do not use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the 2012 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2012 taxable year.
Auto Physical Damage
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 90.2657 90.2657 9.7343 9.5863 98.4790
2013 99.7478 9.4822 0.2522 0.2451 97.2010
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years 0.1261 0.1261 0.1243 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year. g Commercial Auto/Truck Liability/Medical
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 25.7034 25.7034 74.2966 69.8790 94.0541
2013 48.2664 22.5629 51.7336 49.0119 94.7389
2014 67.8834 19.6171 32.1166 30.5298 95.0593
2015 82.0630 14.1795 17.9370 17.0291 94.9384
2016 90.4161 8.3532 9.5839 9.0483 94.4114
2017 94.6293 4.2132 5.3707 5.0362 93.7708
2018 97.0203 2.3910 2.9797 2.7564 92.5056
2019 98.2283 1.2081 1.7717 1.6107 90.9135
2020 98.6653 0.4370 1.3347 1.2140 90.9566
2021 98.8635 0.1982 1.1365 1.0480 92.2160
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 0.1982 0.9382 0.8772 93.4963
2023 0.1982 0.7400 0.7015 94.7956
2024 0.1982 0.5417 0.5207 96.1082
2025 0.1982 0.3435 0.3346 97.4146
2026 and later years 0.1982 0.1453 0.1432 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 94.9072 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Composite
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 39.5281 39.5281 60.4719 55.7933 92.2631
2013 62.0267 22.4986 37.9733 34.5843 91.0753
2014 73.7017 11.6750 26.2983 23.7413 90.2768
2015 80.0846 6.3830 19.9154 17.9529 90.1459
2016 85.7818 5.6971 14.2182 12.6929 89.2717
2017 90.2809 4.4992 9.7191 8.4960 87.4154
2018 91.9588 1.6778 8.0412 7.0396 87.5436
2019 92.9722 1.0134 7.0278 6.2151 88.4353
2020 94.0835 1.1113 5.9165 5.2674 89.0295
2021 94.7469 0.6634 5.2531 4.7468 90.3608
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 0.6634 4.5898 4.2111 91.7492
2023 0.6634 3.9264 3.6599 93.2124
2024 0.6634 3.2631 3.0928 94.7824
2025 0.6634 2.5997 2.5093 96.5231
2026 and later years 0.6634 1.9364 1.9090 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 93.7821 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Fidelity/Surety
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 22.8449 22.8449 77.1551 74.2475 96.2315
2013 55.8585 33.0137 44.1415 42.9060 97.2010
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years 22.0707 22.0707 21.7586 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Financial Guaranty/Mortgage Guaranty
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 6.2515 6.2515 93.7485 90.0777 96.0845
2013 43.0154 36.7639 56.9846 55.3896 97.2010
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years 28.4923 28.4923 28.0893 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
International (Composite)
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 39.5281 39.5281 60.4719 55.7933 92.2631
2013 62.0267 22.4986 37.9733 34.5843 91.0753
2014 73.7017 11.6750 26.2983 23.7413 90.2768
2015 80.0846 6.3830 19.9154 17.9529 90.1459
2016 85.7818 5.6971 14.2182 12.6929 89.2717
2017 90.2809 4.4992 9.7191 8.4960 87.4154
2018 91.9588 1.6778 8.0412 7.0396 87.5436
2019 92.9722 1.0134 7.0278 6.2151 88.4353
2020 94.0835 1.1113 5.9165 5.2674 89.0295
2021 94.7469 0.6634 5.2531 4.7468 90.3608
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 0.6634 4.5898 4.2111 91.7492
2023 0.6634 3.9264 3.6599 93.2124
2024 0.6634 3.2631 3.0928 94.7824
2025 0.6634 2.5997 2.5093 96.5231
2026 and later years 0.6634 1.9364 1.9090 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 93.7821 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Medical Professional Liability -- Claims-Made
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 6.3462 6.3462 93.6538 85.6244 91.4266
2013 23.0958 16.7496 76.9042 71.1091 92.4645
2014 41.6827 18.5868 58.3173 54.3106 93.1295
2015 56.5267 14.8440 43.4733 40.8232 93.9041
2016 71.2882 14.7615 28.7118 27.0298 94.1415
2017 82.3023 11.0141 17.6977 16.6387 94.0165
2018 86.5143 4.2120 13.4857 12.8472 95.2653
2019 91.1422 4.6279 8.8578 8.5242 96.2335
2020 94.8664 3.7242 5.1336 4.9929 97.2591
2021 97.5408 2.6745 2.4592 2.4244 98.5856
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 and later years 2.4592 -- -- 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Medical Professional Liability -- Occurrence
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 1.2044 1.2044 98.7956 86.1709 87.2213
2013 4.3376 3.1332 95.6624 85.4830 89.3591
2014 11.8161 7.4785 88.1839 80.3677 91.1365
2015 24.7088 12.8928 75.2912 69.6126 92.4579
2016 42.3863 17.6774 57.6137 53.6934 93.1954
2017 57.1600 14.7738 42.8400 40.2594 93.9762
2018 68.9797 11.8196 31.0203 29.4337 94.8851
2019 82.4247 13.4450 17.5753 16.6464 94.7145
2020 86.7084 4.2837 13.2916 12.7823 96.1682
2021 91.6701 4.9617 8.3299 8.1188 97.4659
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 and later years 4.9617 3.3683 3.3206 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 93.6211 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Miscellaneous Casualty
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 69.0731 69.0731 30.9269 29.8935 96.6586
2013 85.5169 16.4438 14.4831 14.0777 97.2010
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years 7.2415 7.2415 7.1391 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Multiple Peril Lines (Homeowners/Farmowners, Commercial Multiple Peril, and Special Liability (Ocean Marine, Aircraft (All Perils), Boiler and Machinery))
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 60.9719 60.9719 39.0281 37.0187 94.8513
2013 82.9059 21.9341 17.0941 15.8398 92.6624
2014 89.2783 6.3724 10.7217 9.8337 91.7181
2015 91.5605 2.2822 8.4395 7.8029 92.4579
2016 94.4255 2.8649 5.5745 5.1224 91.8898
2017 96.5899 2.1644 3.4101 3.0750 90.1726
2018 97.6023 1.0124 2.3977 2.1369 89.1235
2019 98.0034 0.4011 1.9966 1.7918 89.7436
2020 98.3410 0.3376 1.6590 1.5012 90.4859
2021 98.5727 0.2317 1.4273 1.3096 91.7483
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 0.2317 1.1957 1.1124 93.0370
2023 0.2317 0.9640 0.9096 94.3539
2024 0.2317 0.7324 0.7009 95.7035
2025 0.2317 0.5007 0.4862 97.0975
2026 and later years 0.2317 0.2691 0.2653 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 93.1358 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Other (Including Credit)
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 54.6589 54.6589 45.3411 44.0509 97.1546
2013 84.2314 29.5725 15.7686 15.3272 97.2010
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years 7.8843 7.8843 7.7728 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Other Liability -- Claims-Made
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 7.4270 7.4270 92.5730 84.1387 90.8891
2013 25.2808 17.8538 74.7192 68.4604 91.6236
2014 44.2108 18.9301 55.7892 51.2373 91.8409
2015 56.4956 12.2848 43.5044 40.2571 92.5355
2016 69.2838 12.7883 30.7162 28.4487 92.6181
2017 77.6662 8.3823 22.3338 20.7683 92.9904
2018 83.1572 5.4910 16.8428 15.7987 93.8010
2019 88.1777 5.0205 11.8223 11.1628 94.4213
2020 93.1315 4.9539 6.8685 6.4605 94.0597
2021 92.9490 -0.1826 7.0510 6.8324 96.8986
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 3.2639 3.7871 3.7191 98.2030
2023 and later years 3.2639 0.5232 0.5158 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.2239 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Other Liability -- Occurrence
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 10.0721 10.0721 89.9279 79.6509 88.5720
2013 24.3995 14.3274 75.6005 67.4199 89.1791
2014 37.3366 12.9372 62.6634 56.2456 89.7583
2015 52.4142 15.0776 47.5858 42.5771 89.4745
2016 64.3437 11.9295 35.6563 31.7069 88.9239
2017 73.7950 9.4512 26.2050 23.0365 87.9085
2018 79.7756 5.9807 20.2244 17.6357 87.2005
2019 84.0963 4.3206 15.9037 13.7628 86.5381
2020 85.6878 1.5915 14.3122 12.5462 87.6607
2021 86.9224 1.2346 13.0776 11.6565 89.1329
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 1.2346 11.8431 10.7411 90.6950
2023 1.2346 10.6085 9.7992 92.3713
2024 1.2346 9.3740 8.8302 94.1988
2025 1.2346 8.1394 7.8331 96.2365
2026 and later years 1.2346 6.9048 6.8072 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 92.6009 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Private Passenger Auto Liability/Medical
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 42.9881 42.9881 57.0119 54.6061 95.7801
2013 71.9931 29.0051 28.0069 26.7630 95.5587
2014 84.8250 12.8318 15.1750 14.5205 95.6868
2015 92.3500 7.5251 7.6500 7.3071 95.5183
2016 96.2665 3.9165 3.7335 3.5456 94.9681
2017 97.9880 1.7214 2.0120 1.9019 94.5282
2018 98.7958 0.8078 1.2042 1.1375 94.4596
2019 99.2445 0.4487 0.7555 0.7152 94.6679
2020 99.4543 0.2097 0.5457 0.5231 95.8548
2021 99.6370 0.1827 0.3630 0.3529 97.2105
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 and later years 0.1827 0.1803 0.1777 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5029 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Products Liability -- Claims-Made
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 4.5270 4.5270 95.4730 83.8330 87.8080
2013 16.0134 11.4865 83.9866 74.6045 88.8291
2014 45.1313 29.1179 54.8687 47.2249 86.0690
2015 39.2459 -5.8854 60.7541 54.5596 89.8039
2016 44.8357 5.5898 55.1643 50.4663 91.4837
2017 72.1615 27.3258 27.8385 24.2070 86.9550
2018 80.4448 8.2834 19.5552 16.5044 84.3991
2019 73.2957 -7.1491 26.7043 24.2330 90.7459
2020 87.4824 14.1866 12.5176 10.5432 84.2267
2021 87.7500 0.2677 12.2500 10.5764 86.3381
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 0.2677 11.9823 10.6106 88.5517
2023 0.2677 11.7147 10.6457 90.8750
2024 0.2677 11.4470 10.6819 93.3158
2025 0.2677 11.1793 10.7191 95.8828
2026 and later years 0.2677 10.9117 10.7573 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 92.8642 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Products Liability -- Occurrence
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 7.1936 7.1936 92.8064 80.9429 87.2170
2013 16.9555 9.7619 83.0445 73.3802 88.3625
2014 28.3624 11.4069 71.6376 63.9304 89.2413
2015 39.7945 11.4321 60.2055 54.1818 89.9948
2016 54.3906 14.5961 45.6094 40.9422 89.7670
2017 60.9060 6.5154 39.0940 35.5165 90.8490
2018 67.7760 6.8700 32.2240 29.5744 91.7775
2019 75.7119 7.9359 24.2881 22.3793 92.1411
2020 79.5966 3.8847 20.4034 19.0856 93.5415
2021 83.9430 4.3464 16.0570 15.2285 94.8401
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 4.3464 11.7107 11.2599 96.1507
2023 4.3464 7.3643 7.1766 97.4508
2024 and later years 4.3464 3.0179 2.9752 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 96.3135 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Reinsurance -- Nonproportional Assumed Property
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 20.1003 20.1003 79.8997 75.4585 94.4415
2013 59.2833 39.1830 40.7167 37.8941 93.0676
2014 73.0867 13.8034 26.9133 24.9877 92.8453
2015 80.3675 7.2808 19.6325 18.3246 93.3382
2016 87.7278 7.3603 12.2722 11.3883 92.7976
2017 94.4454 6.7175 5.5546 4.9035 88.2774
2018 96.5143 2.0689 3.4857 2.9466 84.5335
2019 97.9468 1.4326 2.0532 1.5786 76.8884
2020 97.4560 -0.4909 2.5440 2.1222 83.4180
2021 97.0652 -0.3908 2.9348 2.5799 87.9068
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 0.1836 2.7512 2.4682 89.7139
2023 0.1836 2.5675 2.3533 91.6537
2024 0.1836 2.3839 2.2350 93.7531
2025 0.1836 2.2003 2.1133 96.0476
2026 and later years 0.1836 2.0166 1.9881 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 89.7139 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Reinsurance -- Nonproportional Assumed Liability
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 3.4987 3.4987 96.5013 84.4091 87.4694
2013 23.2170 19.7183 76.7830 66.8474 87.0601
2014 43.7483 20.5313 56.2517 47.9534 85.2478
2015 38.9131 -4.8352 61.0869 54.2434 88.7977
2016 47.9298 9.0167 52.0702 46.6654 89.6201
2017 80.0315 32.1017 19.9685 15.4517 77.3805
2018 76.5053 -3.5292 23.4947 19.4751 82.8913
2019 78.1701 1.6649 21.8299 18.3492 84.0554
2020 80.0717 1.9015 19.9283 16.9507 85.0580
2021 79.8791 -0.1926 20.1209 17.6359 87.6494
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 1.1246 18.9963 17.0048 89.5164
2023 1.1246 17.8717 16.3555 91.5162
2024 1.1246 16.7471 15.6875 93.6726
2025 1.1246 15.6225 15.0001 96.0158
2026 and later years 1.1246 14.4979 14.2928 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 91.3700 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Reinsurance -- Nonproportional Assumed Financial Lines
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 1.5423 1.5423 98.4577 88.8020 90.1930
2013 20.9273 19.3850 79.0727 71.7053 90.6827
2014 30.4705 9.5433 69.5295 64.0974 92.1873
2015 46.3043 15.8337 53.6957 49.8889 92.9103
2016 51.8464 5.5421 48.1536 45.7090 94.9234
2017 72.7869 20.9405 27.2131 25.7890 94.7671
2018 82.0967 9.3097 17.9033 17.0911 95.4629
2019 89.2630 7.1664 10.7370 10.3158 96.0773
2020 95.3692 6.1062 4.6308 4.4201 95.4510
2021 96.7995 1.4303 3.2005 3.0970 96.7682
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 1.4303 1.7702 1.7357 98.0539
2023 and later years 1.4303 0.3399 0.3351 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.0539 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
Special Property (Fire, Allied Lines, Inland Marine, Earthquake, Burglary and Theft)
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 55.6145 55.6145 44.3855 43.3187 97.5967
2013 89.3328 33.7182 10.6672 10.3687 97.2010
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years 5.3336 5.3336 5.2582 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Warranty
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 85.4101 85.4101 14.5899 14.3645 98.4555
2013 99.5388 14.1287 0.4612 0.4483 97.2010
Taxpayers that do not use the composite method of Notice 88-100 should use the following factor to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2014 and later years 0.2306 0.2306 0.2273 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 98.5856 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2014 taxable year.
Workers' Compensation
Estimated Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Paid Each Year Year End Year End Factors
Tax Year (%) (%) (%) (%) (%)
______________________________________________________________________________
2012 21.8973 21.8973 78.1027 68.3810 87.5527
2013 43.4962 21.5989 56.5038 48.4485 85.7437
2014 56.0061 12.5099 43.9939 37.1592 84.4646
2015 63.5544 7.5482 36.4456 30.5766 83.8965
2016 68.9880 5.4337 31.0120 25.9486 83.6730
2017 73.9567 4.9687 26.0433 21.6586 83.1638
2018 76.0580 2.1013 23.9420 20.1531 84.1746
2019 77.6365 1.5785 22.3635 19.1344 85.5607
2020 80.1194 2.4828 19.8806 17.1689 86.3597
2021 81.3456 1.2262 18.6544 16.4212 88.0286
Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2012 accident year and that are outstanding at the end of the tax year shown.
2022 1.2262 17.4281 15.6519 89.8084
2023 1.2262 16.2019 14.8604 91.7203
2024 1.2262 14.9757 14.0461 93.7927
2025 1.2262 13.7494 13.2082 96.0635
2026 and later years 1.2262 12.5232 12.3460 98.5856
Taxpayers that use the composite method of Notice 88-100 should use 92.3332 percent to discount unpaid losses incurred in this line of business in 2012 and prior years and that are outstanding at the end of the 2022 taxable year.
SECTION 5. DRAFTING INFORMATION
The principal author of this revenue procedure is David Remus of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure contact Mr. Remus on (202) 622-3970 (not a toll free call).
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2012-23153
- Tax Analysts Electronic Citation2012 TNT 219-19
