SEC. 4. APPLICATION

.01 The following tables present separately for each line of business the discount factors under § 832 for the 1998 accident year. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 1998, which is 6.31 percent, and by assuming all estimated salvage is recovered in the middle of each calendar

year. See Rev. Proc. 98–12, 1998–4 I.R.B. 18, for background regarding the tables. .02 These tables must be used by taxpayers irrespective of whether they elected to discount unpaid losses using their own historical experience under § 846.

.03 Section V of Notice 88–100, 1988– 2 C. B. 439, provides guidance concerning the determination of discount factors for unpaid losses for accident years not separately reported on the annual statement.

.04 Tables.

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

Discount factor for all years equals 96.9869 percent.

Auto Physical Damage

Discount Tax Year Factors (%)

AY+ 0 95.5629 AY+ 1 94.1086 AY+ 2 96.9869

February 16, 1999 50 1999–7 I.R.B.

Commercial Auto/Truck Liability/Medical

Discount Tax Year Factors (%)

AY+ 0 88.0877 AY+ 1 87.2343 AY+ 2 88.9748 AY+ 3 88.2461 AY+ 4 88.0707 AY+ 5 90.4769 AY+ 6 85.7129 AY+ 7 91.4059 AY+ 8 89.8209 AY+ 9 92.4441 AY+10 95.0624 AY+11 96.9869

Composite Discount Factors

Discount Tax Year Factors (%)

AY+ 0 85.5905 AY+ 1 83.9679 AY+ 2 83.5415 AY+ 3 83.4312 AY+ 4 84.1790 AY+ 5 84.7621 AY+ 6 84.8152 AY+ 7 84.9063 AY+ 8 87.7812 AY+ 9 90.3602 AY+10 93.0073 AY+11 95.6372 AY+12 96.9869

Fidelity/Surety

Discount Tax Year Factors (%)

AY+ 0 92.7722 AY+ 1 94.1086 AY+ 2 96.9869

Financial Guaranty/Mortgage Guaranty

Discount Tax Year Factors (%)

AY+ 0 94.6276 AY+ 1 94.1086 AY+ 2 96.9869

International (Composite)

Discount Tax Year Factors (%)

AY+ 0 85.5905 AY+ 1 83.9679 AY+ 2 83.5415 AY+ 3 83.4312 AY+ 4 84.1790 AY+ 5 84.7621 AY+ 6 84.8152 AY+ 7 84.9063 AY+ 8 87.7812 AY+ 9 90.3602 AY+10 93.0073 AY+11 95.6372 AY+12 96.9869

Medical Malpractice — Claims-Made

Discount Tax Year Factors (%)

AY+ 0 69.8162 AY+ 1 72.5074 AY+ 2 71.0313 AY+ 3 70.3729 AY+ 4 73.9549 AY+ 5 72.2896 AY+ 6 82.1032 AY+ 7 91.3723 AY+ 8 96.2843 AY+ 9 96.9869

Medical Malpractice — Occurrence

Discount Tax Year Factors (%)

AY+ 0 63.5702 AY+ 1 66.9550 AY+ 2 71.5334 AY+ 3 75.3549 AY+ 4 72.1156 AY+ 5 78.2176 AY+ 6 83.2218 AY+ 7 86.3771 AY+ 8 90.9036 AY+ 9 93.6031 AY+10 96.3255 AY+11 96.9869

Miscellaneous Casualty

Discount Tax Year Factors (%)

AY+ 0 94.9654 AY+ 1 94.1086 AY+ 2 96.9869

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

Discount Tax Year Factors (%)

AY+ 0 88.1763 AY+ 1 87.1178 AY+ 2 87.8952 AY+ 3 87.5458 AY+ 4 88.6854 AY+ 5 90.1534 AY+ 6 90.1474 AY+ 7 89.0852 AY+ 8 91.5249 AY+ 9 94.2521 AY+10 96.9869

Other (Including Credit)

Discount Tax Year Factors (%)

AY+ 0 96.0279 AY+ 1 94.1086 AY+ 2 96.9869

Other Liability — Claims-Made

Discount Tax Year Factors (%)

AY+ 0 77.2493 AY+ 1 82.7956 AY+ 2 81.7927 AY+ 3 79.4299 AY+ 4 82.4531 AY+ 5 87.1799 AY+ 6 85.6712 AY+ 7 91.4105 AY+ 8 93.5648 AY+ 9 96.2785 AY+10 96.9869

1999–7 I.R.B. 51 February 16, 1999

Other Liability — Occurrence

Discount Tax Year Factors (%)

AY+ 0 78.2359 AY+ 1 78.9690 AY+ 2 81.3835 AY+ 3 83.3811 AY+ 4 84.6518 AY+ 5 82.1857 AY+ 6 86.3353 AY+ 7 88.3258 AY+ 8 92.5005 AY+ 9 95.1170 AY+10 96.9869

Private Passenger Auto Liability/Medical

Discount Tax Year Factors (%)

AY+ 0 91.4498 AY+ 1 90.8941 AY+ 2 89.9496 AY+ 3 89.5590 AY+ 4 89.0875 AY+ 5 89.5493 AY+ 6 88.3238 AY+ 7 89.0595 AY+ 8 89.7588 AY+ 9 92.3809 AY+10 95.0019 AY+11 96.9869

Products Liability — Claims-Made

Discount Tax Year Factors (%)

AY+ 0 78.6781 AY+ 1 80.7444 AY+ 2 85.2984 AY+ 3 85.2066 AY+ 4 80.7335 AY+ 5 87.8419 AY+ 6 80.4105 AY+ 7 87.9957 AY+ 8 96.7091 AY+ 9 96.9869

Products Liability — Occurrence

Discount Tax Year Factors (%)

AY+ 0 75.1746 AY+ 1 77.8160 AY+ 2 76.1658 AY+ 3 77.4849 AY+ 4 79.2679 AY+ 5 78.6033 AY+ 6 79.9964 AY+ 7 71.9945 AY+ 8 77.5374 AY+ 9 80.0152 AY+10 82.6784 AY+11 85.5776 AY+12 88.7971 AY+13 92.4919 AY+14 96.9869

Reinsurance A (Nonproportional Property)

Discount Tax Year Factors (%)

AY+ 0 86.3003 AY+ 1 89.5400 AY+ 2 92.3143 AY+ 3 91.6614 AY+ 4 78.5610 AY+ 5 94.6950 AY+ 6 93.2835 AY+ 7 95.9451 AY+ 8 96.9869

Reinsurance B (Nonproportional Liability)

Discount Tax Year Factors (%)

AY+ 0 74.2486 AY+ 1 76.5505 AY+ 2 77.2843 AY+ 3 76.6711 AY+ 4 79.2080 AY+ 5 74.1857 AY+ 6 75.9657 AY+ 7 83.5910 AY+ 8 86.0435 AY+ 9 88.5976 AY+10 91.2603 AY+11 94.0436 AY+12 96.9869

Reinsurance C (Financial Lines)

Discount Tax Year Factors (%)

AY+ 0 80.7281 AY+ 1 83.1505 AY+ 2 86.4803 AY+ 3 92.4729 AY+ 4 91.0172 AY+ 5 92.9369 AY+ 6 89.3800 AY+ 7 96.8709 AY+ 8 96.9869

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

Discount Tax Year Factors (%)

AY+ 0 92.0841 AY+ 1 94.1086 AY+ 2 96.9869

Workers’ Compensation

Discount Tax Year Factors (%)

AY+ 0 78.0767 AY+ 1 80.5418 AY+ 2 82.4774 AY+ 3 84.0695 AY+ 4 84.1826 AY+ 5 84.3480 AY+ 6 85.5457 AY+ 7 86.3059 AY+ 8 88.7588 AY+ 9 91.4094 AY+10 94.1598 AY+11 96.9869

DRAFTING INFORMATION

The principal author of this revenue procedure is Katherine A. Hossofsky of the Office of the Assistant Chief Counsel (Financial Institutions and Products). For further information regarding this revenue procedure, contact Ms. Hossofsky on (202) 622-3477 (not a toll-free number).

26 CFR 601.204: Changes in accounting periods and in methods of accounting. (Also Part I, sections 446, 475; 1.446–1.)

Rev. Proc. 99–17

February 16, 1999 52 1999–7 I.R.B.