SECTION 1. PURPOSE

This revenue procedure clarifies that for certain insurance companies subject to tax under § 831 of the Internal Revenue Code

the composite method set forth in Notice 88–100, section V, 1988–2 C.B. 439, for computing discounted unpaid losses is permitted but not required. This revenue procedure further provides alternative methods for computing discounted unpaid losses that are permitted for insurance companies not using the composite method, and sets forth a procedure for insurance companies to obtain automatic consent of the Commissioner to change to one of the methods described in this revenue procedure.