SEC. 3. TABLES OF DISCOUNT

FACTORS

.01 The following tables present separately for each line of business the discount factors under § 846 for accident year 1999. All the discount factors presented in this section were determined using the applicable interest rate under

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

Discount factor for all years equals 96.9914 percent.

Auto Physical Damage

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 89.9430 89.9430 10.0570 9.7022 96.4715 AY+ 1 99.3814 9.4384 0.6186 0.5822 94.1173 AY+ 2 N/A 0.3093 0.3093 0.3000 96.9914 AY+ 3 N/A 0.3093 0.0000 0.0000 - * *

Commercial Auto/Truck Liability/Medical

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 25.8075 25.8075 74.1925 64.9334 87.5201 AY+ 1 49.8793 24.0718 50.1207 44.2057 88.1984 AY+ 2 67.6592 17.7799 32.3408 28.6592 88.6163 AY+ 3 79.7711 12.1119 20.2289 17.9771 88.8686 AY+ 4 88.2132 8.4421 11.7868 10.4057 88.2830 AY+ 5 93.1778 4.9646 6.8222 5.9427 87.1083 AY+ 6 95.9623 2.7845 4.0377 3.4462 85.3511 AY+ 7 97.0091 1.0468 2.9909 2.5840 86.3975 AY+ 8 97.5719 0.5628 2.4281 2.1666 89.2302 AY+ 9 98.2191 0.6471 1.7809 1.6359 91.8539 AY+10 N/A 0.6471 1.1338 1.0717 94.5239 AY+11 N/A 0.6471 0.4867 0.4721 96.9914 AY+12 N/A 0.4867 0.0000 0.0000 - * *

1999–42 I.R.B. 509 October 18, 1999

Composite Discount Factors

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 35.4611 35.4611 64.5389 55.2028 85.5342 AY+ 1 59.1449 23.6838 40.8551 34.2621 83.8626 AY+ 2 70.8220 11.6771 29.1780 24.3814 83.5608 AY+ 3 81.9019 11.0799 18.0981 14.4938 80.0847 AY+ 4 86.3688 4.4669 13.6312 10.8015 79.2407 AY+ 5 90.0497 3.6809 9.9503 7.6869 77.2526 AY+ 6 92.7488 2.6991 7.2512 5.3883 74.3092 AY+ 7 93.8259 1.0771 6.1741 4.6173 74.7845 AY+ 8 94.2415 0.4156 5.7585 4.4797 77.7924 AY+ 9 94.8568 0.6153 5.1432 4.1275 80.2516 AY+10 N/A 0.6153 4.5279 3.7531 82.8892 AY+11 N/A 0.6153 3.9125 3.3551 85.7535 AY+12 N/A 0.6153 3.2972 2.9321 88.9266 AY+13 N/A 0.6153 2.6819 2.4824 92.5620 AY+14 N/A 0.6153 2.0665 2.0043 96.9914 AY+15 N/A 2.0665 0.0000 0.0000 ***

Fidelity/Surety

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 24.1540 24.1540 75.8460 70.1069 92.4332 AY+ 1 59.0961 34.9421 40.9039 38.4977 94.1173 AY+ 2 N/A 20.4520 20.4520 19.8367 96.9914 AY+ 3 N/A 20.4520 0.0000 0.0000 - * *

Financial Guaranty/Mortgage Guaranty

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 9.2513 9.2513 90.7487 83.8402 92.3872 AY+ 1 50.5659 41.3146 49.4341 46.5260 94.1173 AY+ 2 N/A 24.7171 24.7171 23.9734 96.9914 AY+ 3 N/A 24.7171 0.0000 0.0000 - * *

October 18, 1999 510 1999–42 I.R.B.

International

(Composite)

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 35.4611 35.4611 64.5389 55.2028 85.5342 AY+ 1 59.1449 23.6838 40.8551 34.2621 83.8626 AY+ 2 70.8220 11.6771 29.1780 24.3814 83.5608 AY+ 3 81.9019 11.0799 18.0981 14.4938 80.0847 AY+ 4 86.3688 4.4669 13.6312 10.8015 79.2407 AY+ 5 90.0497 3.6809 9.9503 7.6869 77.2526 AY+ 6 92.7488 2.6991 7.2512 5.3883 74.3092 AY+ 7 93.8259 1.0771 6.1741 4.6173 74.7845 AY+ 8 94.2415 0.4156 5.7585 4.4797 77.7924 AY+ 9 94.8568 0.6153 5.1432 4.1275 80.2516 AY+10 N/A 0.6153 4.5279 3.7531 82.8892 AY+11 N/A 0.6153 3.9125 3.3551 85.7535 AY+12 N/A 0.6153 3.2972 2.9321 88.9266 AY+13 N/A 0.6153 2.6819 2.4824 92.5620 AY+14 N/A 0.6153 2.0665 2.0043 96.9914 AY+15 N/A 2.0665 0.0000 0.0000 - * *

Medical Malpractice — Claims-Made

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 6.3899 6.3899 93.6101 76.7674 82.0076 AY+ 1 24.0011 17.6112 75.9989 63.4463 83.4831 AY+ 2 42.6970 18.6959 57.3030 48.1675 84.0576 AY+ 3 58.0610 15.3640 41.9390 35.3615 84.3166 AY+ 4 69.6653 11.6043 30.3347 25.6251 84.4744 AY+ 5 75.6033 5.9380 24.3967 21.1172 86.5577 AY+ 6 81.8786 6.2753 18.1214 15.9776 88.1701 AY+ 7 87.8539 5.9753 12.1461 10.8236 89.1118 AY+ 8 89.5207 1.6668 10.4793 9.7870 93.3936 AY+ 9 94.3025 4.7818 5.6975 5.4734 96.0675 AY+10 N/A 4.7818 0.9157 0.8882 96.9914 AY+11 N/A 0.9157 0.0000 0.0000 - * *

1999–42 I.R.B. 511 October 18, 1999

Medical Malpractice — Occurrence

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 2.1239 2.1239 97.8761 71.4452 72.9955 AY+ 1 6.4831 4.3592 93.5169 71.4519 76.4053 AY+ 2 15.5987 9.1156 84.4013 66.5550 78.8553 AY+ 3 31.9062 16.3075 68.0938 53.9345 79.2062 AY+ 4 45.0931 13.1868 54.9069 43.7365 79.6557 AY+ 5 50.0751 4.9821 49.9249 41.3553 82.8351 AY+ 6 60.9728 10.8976 39.0272 32.7250 83.8518 AY+ 7 69.2138 8.2411 30.7862 26.2900 85.3955 AY+ 8 72.8658 3.6519 27.1342 24.1811 89.1165 AY+ 9 80.0005 7.1347 19.9995 18.3484 91.7445 AY+10 N/A 7.1347 12.8648 12.1483 94.4311 AY+11 N/A 7.1347 5.7300 5.5576 96.9914 AY+12 N/A 5.7300 0.0000 0.0000 - * *

Miscellaneous Casualty

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 77.6669 77.6669 22.3331 21.1598 94.7461 AY+ 1 94.0673 16.4004 5.9327 5.5837 94.1173 AY+ 2 N/A 2.9664 2.9664 2.8771 96.9914 AY+ 3 N/A 2.9664 0.0000 0.0000 - * *

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

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 55.9587 55.9587 44.0413 39.0516 88.6704 AY+ 1 77.8939 21.9352 22.1061 18.8962 85.4798 AY+ 2 84.0083 6.1144 15.9917 13.7827 86.1863 AY+ 3 91.3188 7.3105 8.6812 7.1137 81.9437 AY+ 4 92.1670 0.8482 7.8330 6.6873 85.3739 AY+ 5 94.3838 2.2168 5.6162 4.8231 85.8781 AY+ 6 96.4959 2.1121 3.5041 2.9494 84.1680 AY+ 7 97.3670 0.8712 2.6330 2.2370 84.9605 AY+ 8 98.0034 0.6364 1.9966 1.7218 86.2368 AY+ 9 98.4059 0.4025 1.5941 1.4153 88.7833 AY+10 N/A 0.4025 1.1916 1.0895 91.4298 AY+11 N/A 0.4025 0.7892 0.7432 94.1747 AY+12 N/A 0.4025 0.3867 0.3751 96.9914 AY+13 N/A 0.3867 0.0000 0.0000 - * *

October 18, 1999 512 1999–42 I.R.B.

Other (Including Credit)

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 66.7418 66.7418 33.2582 31.3512 94.2659 AY+ 1 89.2755 22.5337 10.7245 10.0936 94.1173 AY+ 2 N/A 5.3622 5.3622 5.2009 96.9914 AY+ 3 N/A 5.3622 0.0000 0.0000 - * *

Other Liability — Claims-Made

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 10.2440 10.2440 89.7560 73.7794 82.2000 AY+ 1 29.3763 19.1323 70.6237 58.7018 83.1191 AY+ 2 44.4111 15.0349 55.5889 46.8988 84.3672 AY+ 3 67.8197 23.4086 32.1803 25.7187 79.9207 AY+ 4 73.4753 5.6555 26.5247 21.5080 81.0867 AY+ 5 78.8604 5.3852 21.1396 17.3108 81.8882 AY+ 6 83.5027 4.6422 16.4973 13.6152 82.5295 AY+ 7 84.0676 0.5649 15.9324 13.8905 87.1838 AY+ 8 85.2129 1.1453 14.7871 13.5847 91.8688 AY+ 9 90.5992 5.3863 9.4008 8.8872 94.5367 AY+10 N/A 5.3863 4.0145 3.8938 96.9914 AY+11 N/A 4.0145 0.0000 0.0000 - * *

Other Liability — Occurrence

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 13.5751 13.5751 86.4249 67.7370 78.3767 AY+ 1 26.3964 12.8213 73.6036 58.7855 79.8676 AY+ 2 40.2725 13.8761 59.7275 48.1824 80.6703 AY+ 3 55.4566 15.1841 44.5434 35.5628 79.8385 AY+ 4 65.3309 9.8742 34.6691 27.6227 79.6751 AY+ 5 74.0647 8.7339 25.9353 20.3581 78.4959 AY+ 6 80.9090 6.8442 19.0910 14.5842 76.3927 AY+ 7 84.3622 3.4532 15.6378 11.9426 76.3702 AY+ 8 84.6163 0.2542 15.3837 12.4330 80.8193 AY+ 9 86.7311 2.1147 13.2689 11.0359 83.1712 AY+10 N/A 2.1147 11.1542 9.5509 85.6257 AY+11 N/A 2.1147 9.0395 7.9722 88.1936 AY+12 N/A 2.1147 6.9247 6.2941 90.8938 AY+13 N/A 2.1147 4.8100 4.5103 93.7704 AY+14 N/A 2.1147 2.6953 2.6142 96.9914 AY+15 N/A 2.6953 0.0000 0.0000 - * *

1999–42 I.R.B. 513 October 18, 1999

Private Passenger Auto Liability/Medical

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 37.9339 37.9339 62.0661 56.2648 90.6530 AY+ 1 67.7044 29.7705 32.2956 29.1156 90.1533 AY+ 2 81.5316 13.8272 18.4684 16.6937 90.3908 AY+ 3 89.8898 8.3583 10.1102 9.1279 90.2847 AY+ 4 94.6531 4.7633 5.3469 4.7920 89.6216 AY+ 5 97.1265 2.4734 2.8735 2.5437 88.5243 AY+ 6 98.4587 1.3322 1.5413 1.3305 86.3222 AY+ 7 98.9811 0.5224 1.0189 0.8757 85.9452 AY+ 8 99.2330 0.2519 0.7670 0.6712 87.5035 AY+ 9 99.4067 0.1737 0.5933 0.5344 90.0640 AY+10 N/A 0.1737 0.4196 0.3890 92.6904 AY+11 N/A 0.1737 0.2460 0.2344 95.3018 AY+12 N/A 0.1737 0.0723 0.0701 96.9914 AY+13 N/A 0.0723 0.0000 0.0000 - * *

Products Liability — Claims-Made

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 4.9750 4.9750 95.0250 75.3753 79.3215 AY+ 1 15.1072 10.1322 84.8928 69.6774 82.0769 AY+ 2 30.9560 15.8488 69.0440 57.7267 83.6085 AY+ 3 38.2420 7.2860 61.7580 53.8514 87.1975 AY+ 4 68.6101 30.3681 31.3899 25.9340 82.6188 AY+ 5 78.5966 9.9865 21.4034 17.2716 80.6954 AY+ 6 88.3971 9.8005 11.6029 8.2552 71.1475 AY+ 7 93.2957 4.8986 6.7043 3.7247 55.5568 AY+ 8 88.3815 -4.9142 11.6185 9.0260 77.6862 AY+ 9 89.6105 1.2290 10.3895 8.3274 80.1528 AY+10 N/A 1.2290 9.1604 7.5849 82.8009 AY+11 N/A 1.2290 7.9314 6.7956 85.6799 AY+12 N/A 1.2290 6.7024 5.9566 88.8728 AY+13 N/A 1.2290 5.4733 5.0647 92.5339 AY+14 N/A 1.2290 4.2443 4.1166 96.9914 AY+15 N/A 4.2443 0.0000 0.0000 - * *

October 18, 1999 514 1999–42 I.R.B.

Products Liability — Occurrence

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 9.0653 9.0653 90.9347 68.5721 75.4081 AY+ 1 14.9035 5.8382 85.0965 66.8729 78.5848 AY+ 2 29.2591 14.3555 70.7409 56.2851 79.5651 AY+ 3 45.6462 16.3871 54.3538 42.9356 78.9928 AY+ 4 57.5945 11.9483 42.4055 33.3216 78.5785 AY+ 5 63.8634 6.2689 36.1366 28.9575 80.1335 AY+ 6 75.2266 11.3632 24.7734 19.0662 76.9622 AY+ 7 78.2679 3.0413 21.7321 17.1317 78.8313 AY+ 8 78.1898 -0.0781 21.8102 18.2915 83.8668 AY+ 9 81.8722 3.6825 18.1278 15.6472 86.3162 AY+10 N/A 3.6825 14.4453 12.8363 88.8613 AY+11 N/A 3.6825 10.7628 9.8483 91.5027 AY+12 N/A 3.6825 7.0803 6.6720 94.2328 AY+13 N/A 3.6825 3.3979 3.2956 96.9914 AY+14 N/A 3.3979 0.0000 0.0000 - * *

Reinsurance A (Nonproportional Property)

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 27.1668 27.1668 72.8332 64.6152 88.7167 AY+ 1 68.7008 41.5340 31.2992 25.8636 82.6335 AY+ 2 70.0362 1.3354 29.9638 26.1162 87.1592 AY+ 3 87.5338 17.4976 12.4662 9.7212 77.9803 AY+ 4 90.2132 2.6794 9.7868 7.5712 77.3605 AY+ 5 91.3751 1.1619 8.6249 6.8502 79.4230 AY+ 6 94.3845 3.0095 5.6155 4.1789 74.4181 AY+ 7 93.3293 -1.0552 6.6707 5.5301 82.9022 AY+ 8 N/A 1.0387 5.6320 4.8076 85.3629 AY+ 9 N/A 1.0387 4.5932 4.0395 87.9453 AY+10 N/A 1.0387 3.5545 3.2231 90.6758 AY+11 N/A 1.0387 2.5158 2.3552 93.6165 AY+12 N/A 1.0387 1.4771 1.4326 96.9914 AY+13 N/A 1.4771 0.0000 0.0000 - * *

1999–42 I.R.B. 515 October 18, 1999

Reinsurance B (Nonproportional Liability)

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 6.6962 6.6962 93.3038 68.5209 73.4385 AY+ 1 22.3944 15.6982 77.6056 56.6526 73.0006 AY+ 2 32.6486 10.2542 67.3514 49.6494 73.7169 AY+ 3 50.2234 17.5748 49.7766 34.6574 69.6258 AY+ 4 53.5839 3.3605 46.4161 33.3760 71.9062 AY+ 5 55.6838 2.0999 44.3162 33.3137 75.1727 AY+ 6 63.6144 7.9306 36.3856 27.2358 74.8534 AY+ 7 66.4211 2.8066 33.5789 26.0580 77.6022 AY+ 8 N/A 2.8066 30.7723 24.8059 80.6113 AY+ 9 N/A 2.8066 27.9656 23.4750 83.9423 AY+10 N/A 2.8066 25.1590 22.0602 87.6832 AY+11 N/A 2.8066 22.3524 20.5563 91.9649 AY+12 N/A 2.8066 19.5457 18.9577 96.9914 AY+13 N/A 19.5457 0.0000 0.0000 - * *

Reinsurance C (Financial Lines)

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 11.4622 11.4622 88.5378 76.8870 86.8408 AY+ 1 44.5791 33.1169 55.4209 47.5866 85.8641 AY+ 2 63.9134 19.3343 36.0866 30.6506 84.9362 AY+ 3 65.6185 1.7051 34.3815 30.8235 89.6516 AY+ 4 79.9778 14.3593 20.0222 17.9607 89.7042 AY+ 5 88.9152 8.9374 11.0848 9.8777 89.1099 AY+ 6 91.2490 2.3338 8.7510 8.0938 92.4895 AY+ 7 94.7645 3.5155 5.2355 4.9791 95.1030 AY+ 8 N/A 3.5155 1.7200 1.6682 96.9914 AY+ 9 N/A 1.7200 0.0000 0.0000 - * *

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

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 57.4895 57.4895 42.5105 40.4302 95.1064 AY+ 1 90.5193 33.0297 9.4807 8.9230 94.1173 AY+ 2 N/A 4.7404 4.7404 4.5978 96.9914 AY+ 3 N/A 4.7404 0.0000 0.0000 - * *

October 18, 1999 516 1999–42 I.R.B.

Workers’ Compensation

Discounted Cumulative Estimated Unpaid Unpaid Losses Losses Paid Losses at Losses at Discount Tax Year Paid Each Year Year End Year End Factors (%) (%) (%) (%) (%)

AY+ 0 23.6461 23.6461 76.3539 62.2052 81.4696 AY+ 1 44.8166 21.1705 55.1834 44.2969 80.2722 AY+ 2 57.9652 13.1486 42.0348 33.5311 79.7700 AY+ 3 72.0542 14.0889 27.9458 21.1177 75.5664 AY+ 4 80.5542 8.5000 19.4458 13.6844 70.3719 AY+ 5 84.8876 4.3334 15.1124 10.0786 66.6913 AY+ 6 87.1173 2.2297 12.8827 8.4147 65.3182 AY+ 7 88.2647 1.1473 11.7353 7.7619 66.1415 AY+ 8 88.5404 0.2757 11.4596 7.9666 69.5194 AY+ 9 88.8062 0.2658 11.1938 8.1945 73.2056 AY+10 N/A 0.2658 10.9279 8.4366 77.2025 AY+11 N/A 0.2658 10.6621 8.6941 81.5418 AY+12 N/A 0.2658 10.3963 8.9677 86.2590 AY+13 N/A 0.2658 10.1304 9.2586 91.3940 AY+14 N/A 0.2658 9.8646 9.5678 96.9914 AY+15 N/A 9.8646 0.0000 0.0000 - * *

Auto Physical Damage

Discount Tax Year Factors

(%)

AY+ 0 95.5695 AY+ 1 94.1173 AY+ 2 96.9914

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 601.201: Rulings and determination letters. (Also Part I, sections 832, 846; 1.832–4, 1.846–1.)

Rev. Proc. 99–37