rp-08-70.pdf

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# Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Rulings and determination letters.
(Also Part I, Sections 846; 1.846-1.)

Rev. Proc. 2008-70

## SECTION 1. PURPOSE

This revenue procedure prescribes the loss payment patterns and discount factors for the
2008 accident year. These factors will be used for computing discounted unpaid losses under
§ 846 of the Internal Revenue Code. See Rev. Proc. 2008-10, 2008-3 I.R.B. 290, for background
concerning the loss payment patterns and application of the discount factors. This revenue
procedure also corrects the discount factors for the Composite and International (Composite)
lines of business for the 2006 and 2007 accident years in Rev. Proc. 2007-9, 2007-1 C.B. 278,
and Rev. Proc. 2008-10, 2008-3 I.R.B. 290, for taxpayers that use the composite method of
Notice 88-100, 1988-2. C.B. 439.

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## SECTION 2. SCOPE

This revenue procedure applies to any taxpayer that is required to discount its unpaid
losses under § 846 for a line of business using discount factors published by the Secretary.
SECTION 3. CORRECTION OF REV. PROC. 2007-9 AND REV. PROC. 2008-10

.01 Rev. Proc. 2007-9, 2007-1 C.B. 278, prescribes the loss payment patterns and
discount factors for the 2006 accident year. Rev. Proc. 2008-10, 2008-3 I.R.B. 290, prescribes
the loss payment patterns and discount factors for the 2007 accident year. An error has been
discovered in the composite discount factors for the 2006 and 2007 accident years that were
determined for the Composite and International (Composite) lines of business for taxpayers that
use the composite method of Notice 88-100, which is used for computing discounted unpaid
losses for accident years not separately reported on the annual statement.

.02 Rev. Proc. 2007-9 as corrected for the Composite line of business provides:
"Taxpayers that use the composite method of Notice 88-100 should use 90.1284 percent to
discount unpaid losses incurred in this line of business in 2006 and prior years that are
outstanding at the end of the 2016 taxable year."

.03 Rev. Proc.2007-9 as corrected for the International (Composite) line of business
provides: "Taxpayers that use the composite method of Notice 88-100 should use 90.1284
percent to discount unpaid losses incurred in this line of business in 2006 and prior years that are
outstanding at the end of the 2016 taxable year."

.04 Rev. Proc. 2008-10 as corrected for the Composite line of business provides:
"Taxpayers that use the composite method of Notice 88-100 should use 92.4923 percent to
discount unpaid losses incurred in this line of business in 2007 and prior years that are
outstanding at the end of the 2017 taxable year."

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.05 Rev. Proc. 2008-10 as corrected for the International (Composite) line of business
provides: "Taxpayers that use the composite method of Notice 88-100 should use 92.4923
percent to discount unpaid losses incurred in this line of business in 2007 and prior years that are
outstanding at the end of the 2017 taxable year."

## 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 2008. All the discount factors presented in this section were
determined using the applicable interest rate under § 846(c) for 2008, which is 4.06 percent, and
by assuming all loss payments occur in the middle of the calendar year.

.02 If the groupings of individual lines of business on the annual statement change,
taxpayers must discount the unpaid losses on the affected lines of business in accordance with
the discounting patterns that would have applied to those unpaid losses based on their
classification on the 2005 annual statement. See Rev. Proc. 2008-10, 2008-3 I.R.B. 290, section
2, for additional background on discounting under section 846 and the use of the Secretary's
tables.

.03 Section V of Notice 88-100, 1988-2 C.B. 439, sets forth a composite method for
computing discounted unpaid losses for accident years that are not separately reported on the
annual statement. The tables separately provide discount factors for taxpayers who elect to use
the composite method of section V of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. 980.
.04 Tables.

Tables of Factors to be Used to Discount
Unpaid Losses Incurred in
Accident Year 2008

(Interest rate: 4.06 percent)

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# Accident and Health (Other Than Disability Income or Credit Disability Insurance)

Taxpayers that do not use the composite method of Notice 88-100 should use 98.0298
percent to discount unpaid losses incurred in this line of business in the 2008 accident
year and that are outstanding at the end of the 2008 and later taxable years.

Taxpayers that use the composite method of Notice 88-100 should use 98.0298 percent
to discount all unpaid losses in this line of business that are outstanding at the end of
the 2008 taxable year.

## Auto Physical Damage

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

89.4096

89.4096

10.5904

10.3639

97.8613

2009

99.6848

10.2752

0.3152

0.3030

96.1174

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2010 and later years

0.1576

0.1576

0.1545

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 98.0298
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2010 taxable year.

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## Commercial Auto/Truck Liability/Medical

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End

Discounted Unpaid Losses at Year End

Discount Factors (%)

(%)

(%)

2008

23.6718

23.6718

76.3282

70.1942

91.9637

2009

47.5425

23.8708

52.4575

48.6936

92.8249

2010

66.6847

19.1421

33.3153

31.1437

93.4816

2011

81.5105

14.8258

18.4895

17.2843

93.4819

2012

90.0548

8.5443

9.9452

9.2701

93.2115

2013

94.7311

4.6763

5.2689

4.8762

92.5459

2014

97.0602

2.3292

2.9398

2.6982

91.7820

2015

98.1174

1.0572

1.8826

1.7293

91.8572

2016

98.8692

0.7518

1.1308

1.0326

91.3161

2017

99.1160

0.2467

0.8840

0.8228

93.0737

Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the

2008 accident year and that are outstanding at the end of the tax year shown.

2018

0.2467

0.6373

0.6045

94.8560

2019

0.2467

0.3906

0.3774

96.6210

2020 and

later years

0.2467

0.1439

0.1410

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 95.5540
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Composite

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

34.7004

34.7004

65.2996

59.2808

90.7829

2009

58.6076

23.9072

41.3924

37.2999

90.1131

2010

71.7608

13.1532

28.2392

25.3968

89.9346

2011

81.4987

9.7379

18.5013

16.4943

89.1521

2012

87.8488

6.3501

12.1512

10.6863

87.9440

2013

91.4226

3.5739

8.5774

7.4744

87.1415

2014

93.4057

1.9831

6.5943

5.7549

87.2720

2015

94.2280

0.8222

5.7720

5.1498

89.2206

2016

95.4875

1.2595

4.5125

4.0741

90.2843

2017

96.3560

0.8685

3.6440

3.3535

92.0287

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factors to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2018

0.8685

2.7754

2.6036

93.8109

2019

0.8685

1.9069

1.8233

95.6199

2020

0.8685

1.0383

1.0114

97.4044

2021 and later years

0.8685

0.1698

0.1664

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 94.3096
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Fidelity/Surety

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

25.2328

25.2328

74.7672

71.0916

95.0839

2009

61.1025

35.8698

38.8975

37.3872

96.1174

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2010 and later years

19.4487

19.4487

19.0655

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 98.0298
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2010 taxable year.

## Financial Guaranty/Mortgage Guaranty

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

7.7824

7.7824

92.2176

88.2568

95.7050

2009

62.1390

54.3565

37.8610

36.3911

96.1174

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2010 and later years
18.9305

18.9305

18.5575
98.0298

Taxpayers that use the composite method of Notice 88-100 should use 98.0298
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2010 taxable year.

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## International (Composite)

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End

Discounted Unpaid Losses at Year End

Discount Factors (%)

(%)

(%)

2008

34.7004

34.7004

65.2996

59.2808

90.7829

2009

58.6076

23.9072

41.3924

37.2999

90.1131

2010

71.7608

13.1532

28.2392

25.3968

89.9346

2011

81.4987

9.7379

18.5013

16.4943

89.1521

2012

87.8488

6.3501

12.1512

10.6863

87.9440

2013

91.4226

3.5739

8.5774

7.4744

87.1415

2014

93.4057

1.9831

6.5943

5.7549

87.2720

2015

94.2280

0.8222

5.7720

5.1498

89.2206

2016

95.4875

1.2595

4.5125

4.0741

90.2843

2017

96.3560

0.8685

3.6440

3.3535

92.0287

Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown.

2018

0.8685

2.7754

2.6036

93.8109

2019

0.8685

1.9069

1.8233

95.6199

2020

0.8685

1.0383

1.0114

97.4044

2021 and later years

0.8685

0.1698

0.1664

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 94.3096
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Medical Malpractice -- Claims-Made

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

4.9425

4.9425

95.0575

85.0276

89.4485

2009

19.9369

14.9944

80.0631

73.1839

91.4078

2010

44.3489

24.4120

55.6511

51.2525

92.0962

2011

64.8374

20.4885

35.1626

32.4331

92.2375

2012

80.2530

15.4156

19.7470

18.0245

91.2770

2013

85.7907

5.5377

14.2093

13.1072

92.2442

2014

91.2722

5.4815

8.7278

8.0478

92.2082

2015

93.3314

2.0593

6.6686

6.2739

94.0812

2016

96.1257

2.7942

3.8743

3.6782

94.9374

2017

97.6538

1.5281

2.3462

2.2687

96.6961

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2018 and later years

1.5281

0.8182

0.8021

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 98.0440
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Medical Malpractice -- Occurrence

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End

Discounted Unpaid Losses at Year End

Discount Factors (%)

(%)

(%)

2008

1.5878

1.5878

98.4122

82.1817

83.5076

2009

4.4720

2.8842

95.5280

82.5760

86.4417

2010

17.7738

13.3018

82.2262

72.3595

88.0005

2011

35.8814

18.1076

64.1186

56.8257

88.6260

2012

52.9447

17.0633

47.0553

41.7266

88.6757

2013

68.4348

15.4901

31.5652

27.6193

87.4993

2014

79.5616

11.1268

20.4384

17.3902

85.0861

2015

85.8198

6.2582

14.1802

11.7123

82.5961

2016

90.1267

4.3069

9.8733

7.7943

78.9437

2017

90.3701

0.2434

9.6299

7.8625

81.6469

Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown.

2018

0.2434

9.3865

7.9335

84.5197

2019

0.2434

9.1431

8.0073

87.5770

2020

0.2434

8.8998

8.0841

90.8352

2021

0.2434

8.6564

8.1641

94.3126

2022 and

later years

0.2434

8.4130

8.2473

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 86.1528
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Miscellaneous Casualty

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

72.9064

72.9064

27.0936

26.1964

96.6888

2009

93.5836

20.6771

6.4164

6.1673

96.1174

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2010 and later years

3.2082

3.2082

3.1450

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 98.0298
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2010 taxable year.

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

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

52.5880

52.5880

47.4120

44.2537

93.3385

2009

80.0449

27.4570

19.9551

18.0416

90.4110

2010

86.1625

6.1175

13.8375

12.5336

90.5767

2011

90.7452

4.5827

9.2548

8.3676

90.4137

2012

93.9006

3.1555

6.0994

5.4885

89.9844

2013

95.7613

1.8607

4.2387

3.8132

89.9627

2014

96.8755

1.1141

3.1245

2.8315

90.6219

2015

97.6715

0.7960

2.3285

2.1345

91.6659

2016

98.0329

0.3615

1.9671

1.8524

94.1706

2017

98.6810

0.6481

1.3190

1.2665

96.0207

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factors to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2018

0.6481

0.6709

0.6568

97.8997

2019 and later years

0.6481

0.0228

0.0224

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 97.9053
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Other (Including Credit)

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

67.9528

67.9528

32.0472

30.8190

96.1676

2009

89.4609

21.5081

10.5391

10.1299

96.1174

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2010 and later years

5.2695

5.2695

5.1657

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 98.0298
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2010 taxable year.

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## Other Liability -- Claims-Made

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

Losses at Year End

(%)

2008

5.8796

5.8796

94.1204

83.2369

88.4367

2009

18.8735

12.9938

81.1265

73.3613

90.4283

2010

41.6840

22.8105

58.3160

53.0709

91.0056

2011

62.5322

20.8483

37.4678

33.9583

90.6333

2012

73.5207

10.9885

26.4793

24.1277

91.1189

2013

82.0036

8.4829

17.9964

16.4539

91.4286

2014

88.6279

6.6244

11.3721

10.3644

91.1391

2015

90.7107

2.0828

9.2893

8.6605

93.2317

2016

94.8439

4.1332

5.1561

4.7959

93.0145

2017

96.2689

1.4249

3.7311

3.5370

94.7977

Taxpayers that do not use the composite method of Notice 88-100 should use the

following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown.

2018

1.4249

2.3062

2.2270

96.5683

2019 and

later years

1.4249

0.8812

0.8639

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 97.0645
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Other Liability -- Occurrence

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year

Unpaid Losses at Year End

Discounted Unpaid Losses at Year End

Discount Factors

(%)

(%)

(%)

(%)

2008

13.6594

13.6594

86.3406

74.5578

86.3531

2009

24.8389

11.1795

75.1611

66.1806

88.0517

2010

41.7792

16.9403

58.2208

51.5868

88.6055

2011

58.4995

16.7203

41.5005

36.6249

88.2518

2012

69.5197

11.0203

30.4803

26.8702

88.1560

2013

77.7513

8.2316

22.2487

19.5641

87.9336

2014

84.2243

6.4730

15.7757

13.7553

87.1929

2015

83.2275

-0.9968

16.7725

15.3306

91.4032

2016

88.8524

5.6249

11.1476

10.2151

91.6347

2017

91.3852

2.5328

8.6148

8.0461

93.3986

Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the

2008 accident year and that are outstanding at the end of the tax year shown.

2018

2.5328

6.0820

5.7891

95.1836

2019

2.5328

3.5492

3.4404

96.9345

2020 and

later years

2.5328

1.0164

0.9964

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 94.7637
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Private Passenger Auto Liability/Medical

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

42.6108

42.6108

57.3892

54.0511

94.1835

2009

71.5827

28.9719

28.4173

26.6915

93.9269

2010

84.6947

13.1120

15.3053

14.3997

94.0826

2011

92.3556

7.6610

7.6444

7.1693

93.7860

2012

96.2369

3.8812

3.7631

3.5012

93.0391

2013

97.9275

1.6907

2.0725

1.9187

92.5799

2014

98.7719

0.8444

1.2281

1.1352

92.4394

2015

99.2692

0.4973

0.7308

0.6740

92.2334

2016

99.5053

0.2361

0.4947

0.4606

93.0998

2017

99.6440

0.1387

0.3560

0.3378

94.8818

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factors to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2018

0.1387

0.2174

0.2101

96.6446

2019 and later years

0.1387

0.0787

0.0772

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 97.0811
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Products Liability -- Claims-Made

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

1.0259

1.0259

98.9741

84.7900

84.6586

2009

11.7927

10.7667

88.2073

76.2088

86.3973

2010

29.3642

17.5716

70.6358

61.3781

86.8939

2011

55.1655

25.8012

44.8345

37.5503

83.7531

2012

83.4171

28.2516

16.5829

10.2554

61.8434

2013

64.8933

-18.5238

35.1067

29.5679

84.2229

2014

82.3346

17.4414

17.6654

12.9765

73.4571

2015

86.3986

4.0640

13.6014

9.3576

68.7991

2016

76.3310

-10.0676

23.6690

20.0075

84.5305

2017

78.7910

2.4600

21.2090

18.3104

86.3331

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2018

2.4600

18.7490

16.5444

88.2412

2019

2.4600

16.2890

14.7066

90.2855

2020

2.4600

13.8290

12.7943

92.5176

2021

2.4600

11.3691

10.8043

95.0326

2022 and later years

2.4600

8.9091

8.7336

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 89.2840
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Products Liability - Occurrence

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid

Discounted Unpaid Losses at Year End

Discount Factors (%)

Losses at Year End

(%)

(%)

2008

5.0466

5.0466

94.9534

80.1653

84.4260

2009

13.6935

8.6469

86.3065

74.5994

86.4354

2010

28.2541

14.5606

71.7459

62.7748

87.4961

2011

41.3083

13.0542

58.6917

52.0070

88.6104

2012

59.3693

18.0610

40.6307

35.6944

87.8509

2013

73.0717

13.7024

26.9283

23.1659

86.0279

2014

74.6612

1.5895

25.3388

22.4849

88.7371

2015

78.9833

4.3221

21.0167

18.9889

90.3513

2016

86.1231

7.1398

13.8769

12.4765

89.9085

2017

88.6931

2.5700

11.3069

10.3614

91.6379

Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown.

2018

2.5700

8.7369

8.1604

93.4018

2019

2.5700

6.1669

5.8701

95.1869

2020

2.5700

3.5969

3.4868

96.9378

2021 and

later years

2.5700

1.0269

1.0067

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 94.0919
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

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## Reinsurance -- Nonproportional Assumed Property

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

12.9458

12.9458

87.0542

80.8403

92.8620

2009

60.1796

47.2338

39.8204

35.9393

90.2535

2010

80.8225

20.6429

19.1775

16.3406

85.2075

2011

84.9430

4.1205

15.0570

12.8008

85.0155

2012

85.6680

0.7250

14.3320

12.5809

87.7821

2013

80.0452

-5.6229

19.9548

18.8276

94.3509

2014

86.7013

6.6561

13.2987

12.8020

96.2654

2015

97.2533

10.5520

2.7467

2.5578

93.1205

2016

97.6721

0.4188

2.3279

2.2344

95.9820

2017

98.8078

1.1357

1.1922

1.1665

97.8487

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2018 and later years

1.1357

0.0564

0.0553

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 94.5477
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

<!-- PageBreak -->

## Reinsurance -- Nonproportional Assumed Liability

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End

Discounted Unpaid Losses at Year End

Discount Factors (%)

(%)

(%)

2008

32.5917

32.5917

67.4083

54.5146

80.8723

2009

33.3995

0.8078

66.6005

55.9039

83.9392

2010

35.4948

2.0953

64.5052

56.0362

86.8708

2011

44.0321

8.5373

55.9679

49.6024

88.6265

2012

64.8299

20.7979

35.1701

30.4004

86.4383

2013

66.4358

1.6059

33.5642

29.9965

89.3706

2014

77.8097

11.3738

22.1903

19.6119

88.3805

2015

82.4438

4.6341

17.5562

15.6809

89.3183

2016

84.1944

1.7507

15.8056

14.5317

91.9406

2017

87.9223

3.7279

12.0777

11.3189

93.7176

Taxpayers that do not use the composite method of Notice 88-100 should use the

following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown.

2018

3.7279

8.3498

7.9757

95.5191

2019

3.7279

4.6219

4.4967

97.2900

2020 and

later years

3.7279

0.8940

0.8764

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 94.6662
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

<!-- PageBreak -->

## Reinsurance -- Nonproportional Assumed Financial Lines

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

8.4783

8.4783

91.5217

82.6377

90.2930

2009

28.0475

19.5693

71.9525

66.0302

91.7692

2010

60.4351

32.3875

39.5649

35.6726

90.1622

2011

82.4448

22.0097

17.5552

14.6688

83.5583

2012

90.2720

7.8271

9.7280

7.2799

74.8343

2013

85.3168

-4.9551

14.6831

12.6301

86.0181

2014

88.3777

3.0608

11.6223

10.0206

86.2186

2015

89.9934

1.6157

10.0066

8.7793

87.7346

2016

81.6664

-8.3269

18.3336

17.6300

96.1625

2017

91.0491

9.3827

8.9509

8.7745

98.0298

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2018 and later years

–
–
–
98.0298

Taxpayers that use the composite method of Notice 88-100 should use 94.5352
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

<!-- PageBreak -->

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

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End (%)

Discounted Unpaid Losses at Year End (%)

Discount Factors (%)

2008

44.5756

44.5756

55.4244

53.5639

96.6430

2009

88.4263

41.8507

13.5737

13.0467

96.1174

Taxpayers that do not use the composite method of Notice 88-100 should use the
following factor to discount unpaid losses incurred in this line of business in the
2008 accident year and that are outstanding at the end of the tax year shown.

2010 and later years

6.7869

6.7869

6.6531

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 98.0298
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2010 taxable year.

<!-- PageBreak -->

## Workers' Compensation

Tax Year

Estimated Cumulative Losses Paid (%)

Estimated Losses Paid Each Year (%)

Unpaid Losses at Year End

Discounted Unpaid Losses at Year End

Discount Factors

(%)

(%)

(%)

2008

19.0410

19.0410

80.9590

69.6415

86.0207

2009

40.2442

21.2032

59.7558

50.8396

85.0789

2010

57.1497

16.9055

42.8503

35.6584

83.2162

2011

67.8601

10.7104

32.1399

26.1804

81.4579

2012

75.5399

7.6797

24.4601

19.4093

79.3507

2013

80.1157

4.5758

19.8843

15.5296

78.0994

2014

82.1828

2.0672

17.8172

14.0513

78.8640

2015

84.4045

2.2217

15.5955

12.3555

79.2248

2016

85.5195

1.1150

14.4805

11.7198

80.9346

2017

86.2855

0.7661

13.7145

11.4141

83.2269

Taxpayers that do not use the composite method of Notice 88-100 should use the

following factors to discount unpaid losses incurred in this line of business in the 2008 accident year and that are outstanding at the end of the tax year shown.

2018

0.7661

12.9484

11.0961

85.6945

2019

0.7661

12.1823

10.7651

88.3666

2020

0.7661

11.4163

10.4207

91.2795

2021

0.7661

10.6502

10.0624

94.4802

2022 and

later years

0.7661

9.8842

9.6894

98.0298

Taxpayers that use the composite method of Notice 88-100 should use 88.0210
percent to discount unpaid losses incurred in this line of business in 2008 and prior
years and that are outstanding at the end of the 2018 taxable year.

## SECTION 5. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2007-9 and Rev. Proc. 2008-10 are modified as to the composite discount
factor to be used by taxpayers that use the composite method of Notice 88-100 under the
Composite and International (Composite) lines of business.

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## 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).