SECTION 4. APPLICATION — Internal Revenue Bulletin 2001-53

.01 The following tables present separately for each line of business the discount factors under § 832 for the 2001 accident year. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2001, which is 6.00 percent, and by assuming all estimated salvage is recovered in the middle of each calendar year. See Rev. Proc. 98–12 (1998–1 C.B. 367) 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. Taxpayers that do not use the methodology set forth in section V of Notice 88–100 should instead use the discount factors for the appropriate year in the Secretary’s table for that line of business. If such taxpayers have unpaid losses relating to an accident year that is older than the last accident year for which a discount factor is presented in the Secretary’s table, those unpaid losses should be discounted using the discount factor for the last accident year in the Secretary’s table. See section 2.03(3) of Rev. Proc. 98–11 (1998–1 C.B. 358).

.04 Tables.

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

Discount factor for all years equals 97.1286 percent.

Auto Physical Damage

Commercial Auto/Truck Liability/Medical

Tax Year (%)

AY+5 90.8892 AY+6 86.3339 AY+7 91.7857 AY+8 90.2742 AY+9 92.7870 AY+10 95.2906 AY+11 97.1286

Tax Year

Discount Factors

Composite Discount Factors

Tax Year

Discount Factors

(%)

Tax Year

Discount Factors

(%)

AY+0 95.7674

AY+1 94.3797 AY+2 97.1286

Commercial Auto/Truck Liability/Medical

Discount Factors

(%)

Tax Year

AY+0 93.0996 AY+1 94.3797

AY+2 97.1286

Tax Year

Discount Factors

(%)

AY+0 88.5939 AY+1 87.7783 AY+2 89.4468 AY+3 88.7496 AY+4 88.5847

December 31, 2001 653 2001–53 I.R.B.

Financial Guaranty/ Mortgage Guaranty

Medical Malpractice — Occurrence

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

Discount Factors

(%)

Tax Year

Discount Factors

(%)

Tax Year

AY+0 94.8732 AY+1 94.3797 AY+2 97.1286

International (Composite)

Tax Year

Discount Factors

(%)

AY+0 64.9126 AY+1 68.2051 AY+2 72.6369 AY+3 76.3310 AY+4 73.2474 AY+5 79.1277 AY+6 83.9409 AY+7 86.9752 AY+8 91.3121 AY+9 93.8960

AY+10 96.4969

AY+11 97.1286

Miscellaneous Casualty

AY+8 91.9074 AY+9 94.5167 AY+10 97.1286

Other (Including Credit)

Tax Year

Discount Factors

(%)

AY+0 86.1785

AY+1 84.6206

AY+2 84.2139

AY+3 84.1124

AY+4 84.8349

AY+5 85.3994

AY+6 85.4575

AY+7 85.5553

AY+8 88.3172

AY+9 90.7912

AY+10 93.3259

AY+11 95.8396

AY+12 97.1286

Medical Malpractice — Claims-Made

Tax Year

Discount Factors

(%)

Tax Year

Discount Factors

(%)

AY+0 96.2118

AY+1 94.3797

AY+2 97.1286

Other Liability — Claims-Made

AY+0 78.1587

AY+1 83.4921

AY+2 82.5351

AY+3 80.2819

AY+4 83.1960 AY+5 87.7328 AY+6 86.3005 AY+7 91.7967 AY+8 93.8594

AY+9 96.4520 AY+10 97.1286

Tax Year

Discount Factors

(%)

AY+0 95.1962

AY+1 94.3797

AY+2 97.1286

Tax Year

Discount Factors

(%)

Discount Factors

(%)

AY+0 70.9439 AY+1 73.5534 AY+2 72.1559

AY+3 71.5538 AY+4 75.0244 AY+5 73.4668

AY+6 82.8921 AY+7 91.7648 AY+8 96.4576 AY+9 97.1286

Tax Year

AY+0 88.6776

AY+1 87.6647 AY+2 88.4118 AY+3 88.0806

AY+4 89.1756 AY+5 90.5830 AY+6 90.5792 AY+7 89.5685

2001–53 I.R.B 654 December 31, 2001

Reinsurance A (Nonproportional Property)

Other Liability — Occurrence

Products Liability — Claims-Made

Discount Factors

(%)

Tax Year

Discount Factors

(%)

Tax Year

Discount Factors

(%)

AY+0 79.1003 AY+1 79.8165 AY+2 82.1449 AY+3 84.0693 AY+4 85.2943 AY+5 82.9430 AY+6 86.9293 AY+7 88.8442 AY+8 92.8410 AY+9 95.3428

AY+10 97.1286

Private Passenger Auto Liability/Medical

AY+0 79.5379 AY+1 81.5337 AY+2 85.9078 AY+3 85.8225 AY+4 81.5464 AY+5 88.3645 AY+6 81.2686 AY+7 88.5406 AY+8 96.8633 AY+9 97.1286

Products Liability — Occurrence

AY+0 86.8922 AY+1 89.9989 AY+2 92.6537 AY+3 92.0270 AY+4 79.5110 AY+5 94.9370 AY+6 93.5902 AY+7 96.1337 AY+8 97.1286

Reinsurance B (Nonproportional Liability)

Discount Factors

(%)

Tax Year

Discount Factors

(%)

Tax Year

Discount Factors

(%)

AY+0 75.2252

AY+1 77.4497

AY+2 78.1634

AY+3 77.5844

AY+4 80.0321

AY+5 75.2265

AY+6 76.9615

AY+7 84.2881

AY+8 86.6481

AY+9 89.1014 AY+10 91.6542

AY+11 94.3176 AY+12 97.1286

AY+0 91.8234

AY+1 91.2893 AY+2 90.3834

AY+3 90.0088

AY+4 89.5577

AY+5 90.0005

AY+6 88.8299

AY+7 89.5391 AY+8 90.2147

AY+9 92.7265 AY+10 95.2329 AY+11 97.1286

AY+0 76.1115

AY+1 78.6586

AY+2 77.0761

AY+3 78.3522

AY+4 80.0713

AY+5 79.4367

AY+6 80.7804

AY+7 73.1074

AY+8 78.4522

AY+9 80.8473

AY+10 83.4161 AY+11 86.2062 AY+12 89.2973 AY+13 92.8357 AY+14 97.1286

December 31, 2001 655 2001–53 I.R.B.

Reinsurance C (Financial Lines)

Workers’ Compensation

DRAFTING INFORMATION

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

Discount Factors

(%)

Tax Year

Discount Factors

(%)

Tax Year

AY+0 81.5339 AY+1 83.8710 AY+2 87.0718 AY+3 92.8074 AY+4 91.4169 AY+5 93.2543 AY+6 89.8633 AY+7 97.0178 AY+8 97.1286

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

AY+0 78.9510 AY+1 81.3287 AY+2 83.1942 AY+3 84.7269 AY+4 84.8406 AY+5 85.0065 AY+6 86.1624 AY+7 86.8999 AY+8 89.2560 AY+9 91.7969 AY+10 94.4286

AY+11 97.1286

Tax Year

Discount Factors

(%)

AY+0 92.4418

AY+1 94.3797

AY+2 97.1286

2001–53 I.R.B 656 December 31, 2001