IRS Issues Loss Payment Patterns, Discount Factors for 2016
NOV. 30, 2016
Rev. Proc. 2016-58; 2016-51 I.R.B. 1
DOCUMENT ATTRIBUTES
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Area/Tax Topics
- Industry GroupsInsurance
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2016-23436
- Tax Analysts Electronic Citation2016 TNT 231-11
Citations: Rev. Proc. 2016-58; 2016-51 I.R.B. 1
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 2016 accident year. These factors will be used to compute discounted unpaid losses under § 846 of the Internal Revenue Code. See Rev. Proc. 2012-44, 2012-49 I.R.B. 645, for background concerning the loss payment patterns and application of the discount factors.
SECTION 2. 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 3. TABLES OF DISCOUNT FACTORS
.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 2016. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2016, which is 1.56 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 2010 annual statement. See Rev. Proc. 2012-44, 2012-49 I.R.B. 645, section 2, for additional background on discounting under § 846 and the use of the Secretary's tables.
.03 Section V of Notice 88-100, 1988-2 C.B. 439, sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. The tables separately provide discount factors for taxpayers who elect to use the composite method of section V of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. 980.
.04 Tables
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 99.2290 percent to discount unpaid losses incurred in this line of business in the 2016 accident year and that are outstanding at the end of the 2016 and later taxable years.
Taxpayers that use the composite method of Notice 88-100 should use 99.2290 percent to discount all unpaid losses in this line of business that are outstanding at the end of the 2016 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 90.2657 90.2657 9.7343 9.6535 99.1701
2017 99.7478 9.4822 0.2522 0.2483 98.4669
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2018 and later years 0.1261 0.1261 0.1251 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2018 taxable year.
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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 25.7034 25.7034 74.2966 71.8363 96.6886
2017 48.2664 22.5629 51.7336 50.2188 97.0718
2018 67.8834 19.6171 32.1166 31.2327 97.2479
2019 82.0630 14.1795 17.9370 17.4302 97.1744
2020 90.4161 8.3532 9.5839 9.2840 96.8715
2021 94.6293 4.2132 5.3707 5.1830 96.5045
2022 97.0203 2.3910 2.9797 2.8543 95.7897
2023 98.2283 1.2081 1.7717 1.6814 94.9023
2024 98.6653 0.4370 1.3347 1.2672 94.9441
2025 98.8635 0.1982 1.1365 1.0872 95.6662
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 0.1982 0.9382 0.9044 96.3940
2027 0.1982 0.7400 0.7187 97.1264
2028 0.1982 0.5417 0.5302 97.8602
2029 0.1982 0.3435 0.3386 98.5845
2030 and later years 0.1982 0.1453 0.1441 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
97.0950 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 39.5281 39.5281 60.4719 57.8180 95.6113
2017 62.0267 22.4986 37.9733 36.0465 94.9259
2018 73.7017 11.6750 26.2983 24.8432 94.4666
2019 80.0846 6.3830 19.9154 18.7981 94.3901
2020 85.7818 5.6971 14.2182 13.3500 93.8935
2021 90.2809 4.4992 9.7191 9.0241 92.8498
2022 91.9588 1.6778 8.0412 7.4740 92.9464
2023 92.9722 1.0134 7.0278 6.5693 93.4763
2024 94.0835 1.1113 5.9165 5.5519 93.8371
2025 94.7469 0.6634 5.2531 4.9700 94.6094
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 0.6634 4.5898 4.3790 95.4073
2027 0.6634 3.9264 3.7788 96.2399
2028 0.6634 3.2631 3.1692 97.1241
2029 0.6634 2.5997 2.5502 98.0937
2030 and later years 0.6634 1.9364 1.9214 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
96.4927 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 22.8449 22.8449 77.1551 75.5562 97.9277
2017 55.8585 33.0137 44.1415 43.4648 98.4669
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2018 and later years 22.0707 22.0707 21.9006 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2018 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 6.2515 6.2515 93.7485 91.7295 97.8464
2017 43.0154 36.7639 56.9846 56.1110 98.4669
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2018 and later years 28.4923 28.4923 28.2726 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2018 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 39.5281 39.5281 60.4719 57.8180 95.6113
2017 62.0267 22.4986 37.9733 36.0465 94.9259
2018 73.7017 11.6750 26.2983 24.8432 94.4666
2019 80.0846 6.3830 19.9154 18.7981 94.3901
2020 85.7818 5.6971 14.2182 13.3500 93.8935
2021 90.2809 4.4992 9.7191 9.0241 92.8498
2022 91.9588 1.6778 8.0412 7.4740 92.9464
2023 92.9722 1.0134 7.0278 6.5693 93.4763
2024 94.0835 1.1113 5.9165 5.5519 93.8371
2025 94.7469 0.6634 5.2531 4.9700 94.6094
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 0.6634 4.5898 4.3790 95.4073
2027 0.6634 3.9264 3.7788 96.2399
2028 0.6634 3.2631 3.1692 97.1241
2029 0.6634 2.5997 2.5502 98.0937
2030 and later years 0.6634 1.9364 1.9214 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
96.4927 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 6.3462 6.3462 93.6538 89.1520 95.1953
2017 23.0958 16.7496 76.9042 73.6651 95.7881
2018 41.6827 18.5868 58.3173 56.0830 96.1686
2019 56.5267 14.8440 43.4733 41.9985 96.6076
2020 71.2882 14.7615 28.7118 27.7775 96.7458
2021 82.3023 11.0141 17.6977 17.1111 96.6856
2022 86.5143 4.2120 13.4857 13.1334 97.3871
2023 91.1422 4.6279 8.8578 8.6744 97.9290
2024 94.8664 3.7242 5.1336 5.0566 98.4989
2025 97.5408 2.6745 2.4592 2.4402 99.2290
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 and later years 2.4592 -- -- 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 1.2044 1.2044 98.7956 91.6674 92.7849
2017 4.3376 3.1332 95.6624 89.9398 94.0180
2018 11.8161 7.4785 88.1839 83.8063 95.0358
2019 24.7088 12.8928 75.2912 72.1207 95.7891
2020 42.3863 17.6774 57.6137 55.4311 96.2115
2021 57.1600 14.7738 42.8400 41.4072 96.6556
2022 68.9797 11.8196 31.0203 30.1417 97.1676
2023 82.4247 13.4450 17.5753 17.0624 97.0618
2024 86.7084 4.2837 13.2916 13.0116 97.8935
2025 91.6701 4.9617 8.3299 8.2144 98.6127
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 and later years 4.9617 3.3683 3.3423 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 69.0731 69.0731 30.9269 30.3590 98.1638
2017 85.5169 16.4438 14.4831 14.2610 98.4669
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2018 and later years 7.2415 7.2415 7.1857 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2018 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 60.9719 60.9719 39.0281 37.9001 97.1096
2017 82.9059 21.9341 17.0941 16.3869 95.8627
2018 89.2783 6.3724 10.7217 10.2205 95.3261
2019 91.5605 2.2822 8.4395 8.0800 95.7413
2020 94.4255 2.8649 5.5745 5.3189 95.4145
2021 96.5899 2.1644 3.4101 3.2206 94.4441
2022 97.6023 1.0124 2.3977 2.2506 93.8655
2023 98.0034 0.4011 1.9966 1.8815 94.2357
2024 98.3410 0.3376 1.6590 1.5706 94.6737
2025 98.5727 0.2317 1.4273 1.3617 95.3998
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 0.2317 1.1957 1.1495 96.1346
2027 0.2317 0.9640 0.9340 96.8791
2028 0.2317 0.7324 0.7151 97.6355
2029 0.2317 0.5007 0.4928 98.4099
2030 and later years 0.2317 0.2691 0.2670 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
96.9112 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 54.6589 54.6589 45.3411 44.6328 98.4380
2017 84.2314 29.5725 15.7686 15.5268 98.4669
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2018 and later years 7.8843 7.8843 7.8235 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2018 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 7.4270 7.4270 92.5730 87.8256 94.8717
2017 25.2808 17.8538 74.7192 71.2032 95.2943
2018 44.2108 18.9301 55.7892 53.2368 95.4250
2019 56.4956 12.2848 43.5044 41.6871 95.8227
2020 69.2838 12.7883 30.7162 29.4498 95.8772
2021 77.6662 8.3823 22.3338 21.4618 96.0953
2022 83.1572 5.4910 16.8428 16.2629 96.5568
2023 88.1777 5.0205 11.8223 11.4571 96.9106
2024 93.1315 4.9539 6.8685 6.6435 96.7242
2025 92.9490 -0.1826 7.0510 6.9311 98.2990
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 3.2639 3.7871 3.7499 99.0184
2027 and later years 3.2639 0.5232 0.5192 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.0369 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 10.0721 10.0721 89.9279 84.0612 93.4762
2017 24.3995 14.3274 75.6005 70.9339 93.8272
2018 37.3366 12.9372 62.6634 59.0027 94.1583
2019 52.4142 15.0776 47.5858 44.7284 93.9954
2020 64.3437 11.9295 35.6563 33.4040 93.6834
2021 73.7950 9.4512 26.2050 24.4004 93.1136
2022 79.7756 5.9807 20.2244 18.7539 92.7295
2023 84.0963 4.3206 15.9037 14.6923 92.3828
2023 85.6878 1.5915 14.3122 13.3176 93.0508
2025 86.9224 1.2346 13.0776 12.2812 93.9100
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 1.2346 11.8431 11.2286 94.8119
2027 1.2346 10.6085 10.1597 95.7689
2028 1.2346 9.3740 9.0740 96.8001
2029 1.2346 8.1394 7.9714 97.9360
2030 and later years 1.2346 6.9048 6.8516 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
96.2276 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 42.9881 42.9881 57.0119 55.6793 97.6626
2017 71.9931 29.0051 28.0069 27.3175 97.5386
2018 84.8250 12.8318 15.1750 14.8121 97.6085
2019 92.3500 7.5251 7.6500 7.4597 97.5123
2020 96.2665 3.9165 3.7335 3.6291 97.2044
2021 97.9880 1.7214 2.0120 1.9509 96.9616
2022 98.7958 0.8078 1.2042 1.1672 96.9294
2023 99.2445 0.4487 0.7555 0.7332 97.0542
2024 99.4543 0.2097 0.5457 0.5333 97.7195
2025 99.6370 0.1827 0.3630 0.3575 98.4721
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 and later years 0.1827 0.1803 0.1789 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 4.5270 4.5270 95.4730 88.8146 93.0259
2017 16.0134 11.4865 83.9866 78.6245 93.6155
2018 45.1313 29.1179 54.8687 50.5069 92.0504
2019 39.2459 -5.8854 60.7541 57.2259 94.1927
2020 44.8357 5.5898 55.1643 52.4854 95.1438
2021 72.1615 27.3258 27.8385 25.7661 92.5555
2022 80.4448 8.2834 19.5552 17.8203 91.1284
2023 73.2957 -7.1491 26.7043 25.3029 94.7525
2024 87.4824 14.1866 12.5176 11.4008 91.0781
2025 87.7500 0.2677 12.2500 11.3089 92.3180
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 0.2677 11.9823 11.2156 93.6014
2027 0.2677 11.7147 11.1208 94.9310
2028 0.2677 11.4470 11.0246 96.3099
2029 0.2677 11.1793 10.9268 97.7413
2030 and later years 0.2677 10.9117 10.8275 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
95.8264 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 7.1936 7.1936 92.8064 86.0592 92.7297
2017 16.9555 9.7619 83.0445 77.5639 93.4004
2018 28.3624 11.4069 71.6376 67.2784 93.9149
2019 39.7945 11.4321 60.2055 56.8070 94.3552
2020 54.3906 14.5961 45.6094 42.9837 94.2430
2021 60.9060 6.5154 39.0940 37.0882 94.8693
2022 67.7760 6.8700 32.2240 30.7434 95.4053
2023 75.7119 7.9359 24.2881 23.2254 95.6247
2024 79.5966 3.8847 20.4034 19.6728 96.4195
2025 83.9430 4.3464 16.0570 15.5996 97.1513
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 4.3464 11.7107 11.4628 97.8837
2027 4.3464 7.3643 7.2615 98.6044
2028 and later years 4.3464 3.0179 2.9947 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
98.2573 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 20.1003 20.1003 79.8997 77.4053 96.8780
2017 59.2833 39.1830 40.7167 39.1254 96.0916
2018 73.0867 13.8034 26.9133 25.8251 95.9565
2019 80.3675 7.2808 19.6325 18.8905 96.2208
2020 87.7278 7.3603 12.2722 11.7677 95.8895
2021 94.4454 6.7175 5.5546 5.1816 93.2838
2022 96.5143 2.0689 3.4857 3.1774 91.1552
2023 97.9468 1.4326 2.0532 1.7833 86.8559
2024 97.4560 -0.4909 2.5440 2.3058 90.6356
2025 97.0652 -0.3908 2.9348 2.7356 93.2116
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 0.1836 2.7512 2.5932 94.2578
2027 0.1836 2.5675 2.4486 95.3671
2028 0.1836 2.3839 2.3017 96.5527
2029 0.1836 2.2003 2.1526 97.8320
2030 and later years 0.1836 2.0166 2.0011 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
96.0251 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 3.4987 3.4987 96.5013 89.5392 92.7855
2017 23.2170 19.7183 76.7830 71.0645 92.5524
2018 43.7483 20.5313 56.2517 51.4823 91.5213
2019 38.9131 -4.8352 61.0869 57.1582 93.5686
2020 47.9298 9.0167 52.0702 48.9631 94.0328
2021 80.0315 32.1017 19.9685 17.3758 87.0160
2022 76.5053 -3.5292 23.4947 21.2005 90.2350
2023 78.1701 1.6649 21.8299 19.8534 90.9460
2024 80.0717 1.9015 19.9283 18.2468 91.5621
2025 79.8791 -0.1926 20.1209 18.7255 93.0650
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 1.1246 18.9963 17.8843 94.1462
2027 1.1246 17.8717 17.0300 95.2901
2028 1.1246 16.7471 16.1623 96.5079
2029 1.1246 15.6225 15.2811 97.8145
2030 and later years 1.1246 14.4979 14.3861 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
95.9885 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 1.5423 1.5423 98.4577 93.0298 94.4871
2017 20.9273 19.3850 79.0727 74.9455 94.7805
2018 30.4705 9.5433 69.5295 66.4972 95.6390
2019 46.3043 15.8337 53.6957 51.5778 96.0558
2020 51.8464 5.5421 48.1536 46.7973 97.1834
2021 72.7869 20.9405 27.2131 26.4241 97.1007
2022 82.0967 9.3097 17.9033 17.4542 97.4915
2023 89.2630 7.1664 10.7370 10.5045 97.8346
2024 95.3692 6.1062 4.6308 4.5147 97.4934
2025 96.7995 1.4303 3.2005 3.1437 98.2266
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 1.4303 1.7702 1.7513 98.9364
2027 and later years 1.4303 0.3399 0.3372 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
98.9741 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 55.6145 55.6145 44.3855 43.8006 98.6824
2017 89.3328 33.7182 10.6672 10.5037 98.4669
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2018 and later years 5.3336 5.3336 5.2925 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2018 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 85.4101 85.4101 14.5899 14.4669 99.1571
2017 99.5388 14.1287 0.4612 0.4541 98.4669
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2018 and later years 0.2306 0.2306 0.2288 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
99.2290 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2018 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 (%) (%) (%) (%) (%)
______________________________________________________________________
2016 21.8973 21.8973 78.1027 72.4793 92.8001
2017 43.4962 21.5989 56.5038 51.8433 91.7519
2018 56.0061 12.5099 43.9939 40.0450 91.0240
2019 63.5544 7.5482 36.4456 33.0628 90.7181
2020 68.9880 5.4337 31.0120 28.1027 90.6188
2021 73.9567 4.9687 26.0433 23.5338 90.3641
2022 76.0580 2.1013 23.9420 21.7833 90.9836
2023 77.6365 1.5785 22.3635 20.5323 91.8119
2024 80.1194 2.4828 19.8806 18.3505 92.3034
2025 81.3456 1.2262 18.6544 17.4010 93.2810
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 2016 accident year and that are outstanding at
the end of the tax year shown.
2026 1.2262 17.4281 16.4367 94.3111
2027 1.2262 16.2019 15.4573 95.4044
2028 1.2262 14.9757 14.4627 96.5746
2029 1.2262 13.7494 13.4525 97.8408
2030 and later years 1.2262 12.5232 12.4266 99.2290
Taxpayers that use the composite method of Notice 88-100 should use
96.0431 percent to discount unpaid losses incurred in this line of
business in 2016 and prior years and that are outstanding at the end
of the 2026 taxable year.
SECTION 4. DRAFTING INFORMATION
The principal author of this revenue procedure is Sharon Y. Horn of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure contact Ms. Horn at (202) 317-4426 (not a toll free call).
DOCUMENT ATTRIBUTES
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Area/Tax Topics
- Industry GroupsInsurance
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2016-23436
- Tax Analysts Electronic Citation2016 TNT 231-11
