SEC. 4. APPLICATION

.01 The following tables present separately for each line of business the discount factors under § 832 for the 1999 accident year. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 1999, which is 6.30 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

96.9914 percent.

1999–42 I.R.B. 517 October 18, 1999

Commercial Auto/Truck

Liability/Medical

Discount Tax Year Factors

(%)

AY+ 0 88.1039 AY+ 1 87.2517 AY+ 2 88.9900 AY+ 3 88.2622 AY+ 4 88.0871 AY+ 5 90.4901 AY+ 6 85.7328 AY+ 7 91.4181 AY+ 8 89.8355 AY+ 9 92.4551 AY+10 95.0697 AY+11 96.9914

Composite Discount Factors

Discount Tax Year Factors

(%)

AY+ 0 85.6093 AY+ 1 83.9887 AY+ 2 83.5630 AY+ 3 83.4530 AY+ 4 84.2000 AY+ 5 84.7825 AY+ 6 84.8358 AY+ 7 84.9271 AY+ 8 87.7984 AY+ 9 90.3741 AY+10 93.0175 AY+11 95.6437 AY+12 96.9914

Fidelity/Surety

Discount Tax Year Factors

(%)

AY+ 0 92.7828 AY+ 1 94.1173 AY+ 2 96.9914

Financial Guaranty/Mortgage

Guaranty

Discount Tax Year Factors

(%)

AY+ 0 94.6355 AY+ 1 94.1173 AY+ 2 96.9914

International

(Composite)

Discount Tax Year Factors

(%)

AY+ 0 85.6093 AY+ 1 83.9887 AY+ 2 83.5630 AY+ 3 83.4530 AY+ 4 84.2000 AY+ 5 84.7825 AY+ 6 84.8358 AY+ 7 84.9271 AY+ 8 87.7984 AY+ 9 90.3741 AY+10 93.0175 AY+11 95.6437 AY+12 96.9914

Medical Malpractice — Claims-Made

Discount Tax Year Factors

(%)

AY+ 0 69.8521 AY+ 1 72.5407 AY+ 2 71.0672 AY+ 3 70.4106 AY+ 4 73.9891 AY+ 5 72.3274 AY+ 6 82.1285 AY+ 7 91.3849 AY+ 8 96.2899 AY+ 9 96.9914

Medical Malpractice — Occurrence

Discount Tax Year Factors

(%)

AY+ 0 63.6130 AY+ 1 66.9948 AY+ 2 71.5686 AY+ 3 75.3861 AY+ 4 72.1518 AY+ 5 78.2468 AY+ 6 83.2448 AY+ 7 86.3963 AY+ 8 90.9167 AY+ 9 93.6125 AY+10 96.3310 AY+11 96.9914

Miscellaneous Casualty

Discount Tax Year Factors

(%)

AY+ 0 94.9728 AY+ 1 94.1173 AY+ 2 96.9914

Discount Tax Year Factors

(%)

AY+ 0 88.1923 AY+ 1 87.1353 AY+ 2 87.9117 AY+ 3 87.5629 AY+ 4 88.7011 AY+ 5 90.1672 AY+ 6 90.1613 AY+ 7 89.1007 AY+ 8 91.5372 AY+ 9 94.2606 AY+10 96.9914

Other (Including Credit)

Discount Tax Year Factors

(%)

AY+ 0 96.0338 AY+ 1 94.1173 AY+ 2 96.9914

Other Liability — Claims-Made

Discount Tax Year Factors

(%)

AY+ 0 77.2784 AY+ 1 82.8178 AY+ 2 81.8164 AY+ 3 79.4571 AY+ 4 82.4769 AY+ 5 87.1976 AY+ 6 85.6914 AY+ 7 91.4229 AY+ 8 93.5743 AY+ 9 96.2841 AY+10 96.9914

Multiple Peril Lines (Homeowners/Farmowners Multiple Peril, Commercial Multiple Peril, and

Special Liability (Ocean Marine,

Aircraft (All Perils), Boiler And

Machinery))

October 18, 1999 518 1999–42 I.R.B.

Other Liability — Occurrence

Discount Tax Year Factors

(%)

AY+ 0 78.2635 AY+ 1 78.9961 AY+ 2 81.4078 AY+ 3 83.4032 AY+ 4 84.6724 AY+ 5 82.2100 AY+ 6 86.3544 AY+ 7 88.3424 AY+ 8 92.5115 AY+ 9 95.1243 AY+10 96.9914

Private Passenger Auto

Liability/Medical

Discount Tax Year Factors

(%)

AY+ 0 91.4618 AY+ 1 90.9068 AY+ 2 89.9635 AY+ 3 89.5735 AY+ 4 89.1026 AY+ 5 89.5637 AY+ 6 88.3400 AY+ 7 89.0749 AY+ 8 89.7735 AY+ 9 92.3920 AY+10 95.0094 AY+11 96.9914

Products Liability — Claims-Made

Discount Tax Year Factors

(%)

AY+ 0 78.7056 AY+ 1 80.7697 AY+ 2 85.3179 AY+ 3 85.2263 AY+ 4 80.7596 AY+ 5 87.8587 AY+ 6 80.4380 AY+ 7 88.0132 AY+ 8 96.7141 AY+ 9 96.9914

Products Liability — Occurrence

Discount Tax Year Factors

(%)

AY+ 0 75.2045 AY+ 1 77.8428 AY+ 2 76.1949 AY+ 3 77.5126 AY+ 4 79.2935 AY+ 5 78.6299 AY+ 6 80.0215 AY+ 7 72.0300 AY+ 8 77.5666 AY+ 9 80.0419 AY+10 82.7021 AY+11 85.5978 AY+12 88.8131 AY+13 92.5030 AY+14 96.9914

Reinsurance A (Nonproportional Property)

Discount Tax Year Factors

(%)

AY+ 0 86.3193 AY+ 1 89.5547 AY+ 2 92.3252 AY+ 3 91.6732 AY+ 4 78.5915 AY+ 5 94.7028 AY+ 6 93.2934 AY+ 7 95.9512 AY+ 8 96.9914

Reinsurance B (Nonproportional Liability)

Discount Tax Year Factors

(%)

AY+ 0 74.2797 AY+ 1 76.5792 AY+ 2 77.3123 AY+ 3 76.7003 AY+ 4 79.2343 AY+ 5 74.2190 AY+ 6 75.9976 AY+ 7 83.6134 AY+ 8 86.0629 AY+ 9 88.6137 AY+10 91.2729 AY+11 94.0524 AY+12 96.9914

Reinsurance C (Financial Lines)

Discount Tax Year Factors

(%)

AY+ 0 80.7539 AY+ 1 83.1736 AY+ 2 86.4993 AY+ 3 92.4836 AY+ 4 91.0300 AY+ 5 92.9471 AY+ 6 89.3955 AY+ 7 96.8756 AY+ 8 96.9914

Discount Tax Year Factors

(%)

AY+ 0 92.0956 AY+ 1 94.1173 AY+ 2 96.9914

Workers’ Compensation

Discount Tax Year Factors

(%)

AY+ 0 78.1046 AY+ 1 80.5669 AY+ 2 82.5003 AY+ 3 84.0905 AY+ 4 84.2036 AY+ 5 84.3691 AY+ 6 85.5654 AY+ 7 86.3250 AY+ 8 88.7748 AY+ 9 91.4218 AY+10 94.1684 AY+11 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).

Special Property (Fire, Allied Lines, Inland Marine,

Earthquake, Glass, Burglary and

Theft)

1999–42 I.R.B. 519 October 18, 1999