SECTION 3. SCOPE — Internal Revenue Bulletin 2003-6

This revenue procedure applies to any taxpayer that is required to discount unpaid losses under § 846 for a line of business using the discount factors published by the Secretary.

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

Taxpayers that do not use the composite method of Notice 88–100 should use 97.2617 percent to discount unpaid losses that are incurred in this line of business in the 2002 accident year and that are outstanding at the end of the 2002 and later tax years.

Taxpayers that use the composite method of Notice 88–100 should use 97.2617 percent to discount all unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2002 tax year.

Auto Physical Damage

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 89.6468 89.6468 10.3532 10.0453 97.0259 2003 99.6845 10.0377 0.3155 0.2986 94.6349

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount unpaid losses that are incurred in this line of business in the 2002 accident year and that are outstanding at the end of the tax year shown.

2004 and later years 0.1578 0.1578 0.1534 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 97.2617 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2004 tax year.

February 10, 2003 428 2003–6 I.R.B.

Commercial Auto/Truck Liability/Medical

Estimated Cumulative

Estimated Losses Paid

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Factors

Tax Year

Paid

(%)

2002 28.8244 28.8244 71.1756 63.9395 89.8335 2003 54.9871 26.1626 45.0129 40.6913 90.3990 2004 72.8039 17.8168 27.1961 24.6963 90.8082 2005 85.0572 12.2533 14.9428 13.5082 90.3992 2006 91.6276 6.5704 8.3724 7.5241 89.8680 2007 94.9514 3.3239 5.0486 4.5363 89.8537 2008 97.0453 2.0938 2.9547 2.6426 89.4349 2009 98.1574 1.1121 1.8426 1.6500 89.5481 2010 98.7370 0.5796 1.2630 1.1483 90.9194 2011 99.1070 0.3700 0.8930 0.8335 93.3331

Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2002 accident year and that are outstanding at the end of the tax year shown.

2012 0.3700 0.5230 0.5007 95.7246 2013 and later years 0.3700 0.1530 0.1488 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 96.4013 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Composite

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 40.9985 40.9985 59.0015 51.8901 87.9471 2003 65.8439 24.8454 34.1561 29.3081 85.8065 2004 77.5023 11.6583 22.4977 18.9950 84.4309 2005 84.6221 7.1198 15.3779 12.7594 82.9722 2006 90.2455 5.6234 9.7545 7.7062 79.0017 2007 92.2780 2.0325 7.7220 6.0566 78.4322 2008 94.3974 2.1195 5.6026 4.2232 75.3807 2009 95.2526 0.8552 4.7474 3.5851 75.5182 2010 96.2792 1.0266 3.7208 2.7343 73.4885 2011 96.4323 0.1531 3.5677 2.7330 76.6061

2003–6 I.R.B. 429 February 10, 2003

Composite

2012 0.1531 3.4145 2.7317 80.0010 2013 0.1531 3.2614 2.7302 83.7124 2014 0.1531 3.1083 2.7286 87.7867 2015 0.1531 2.9551 2.7270 92.2803 2016 and later years 0.1531 2.8020 2.7253 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 88.0794 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Fidelity/Surety

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 38.3328 38.3328 61.6672 56.7940 92.0976 2003 58.8485 20.5156 41.1515 38.9437 94.6349

2004 and later years 20.5758 20.5758 20.0123 97.2617

Financial Guaranty/Mortgage Guaranty

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 4.0723 4.0723 95.9277 88.7169 92.4831 2003 40.7639 36.6916 59.2361 56.0580 94.6349

2004 and later years 29.6180 29.6180 28.8070 97.2617

February 10, 2003 430 2003–6 I.R.B.

International (Composite)

Estimated Cumulative

Estimated Losses Paid

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Factors

Tax Year

Paid

(%)

2012 0.1531 3.4145 2.7317 80.0010 2013 0.1531 3.2614 2.7302 83.7124 2014 0.1531 3.1083 2.7286 87.7867 2015 0.1531 2.9551 2.7270 92.2803 2016 and later years 0.1531 2.8020 2.7253 97.2617

Medical Malpractice — Claims-Made

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 7.3447 7.3447 92.6553 80.0569 86.4030 2003 29.0191 21.6744 70.9809 62.3436 87.8315 2004 53.3108 24.2917 46.6892 40.9278 87.6600 2005 69.1517 15.8409 30.8483 26.9779 87.4534 2006 82.0981 12.9464 17.9019 15.2074 84.9486 2007 86.3995 4.3014 13.6005 11.6532 85.6826 2008 89.7111 3.3116 10.2889 8.9138 86.6354 2009 92.4688 2.7577 7.5312 6.5875 87.4691 2010 94.5163 2.0475 5.4837 4.8584 88.5983 2011 95.7635 1.2471 4.2365 3.8536 90.9614

2003–6 I.R.B. 431 February 10, 2003

Medical Malpractice — Claims-Made

2012 1.2471 2.9894 2.7914 93.3767 2013 1.2471 1.7422 1.6685 95.7688 2014 and later years 1.2471 0.4951 0.4815 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 93.3767 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Medical Malpractice — Occurrence

Estimated Cumulative

Estimated Losses Paid

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Factors

Tax Year

Paid

(%)

2002 0.8316 0.8316 99.1684 79.3040 79.9691 2003 7.4573 6.6257 92.5427 77.0201 83.2266 2004 23.5575 16.1002 76.4425 64.8645 84.8539 2005 41.0062 17.4487 58.9938 50.6283 85.8197 2006 55.5832 14.5770 44.4168 38.5318 86.7505 2007 68.9413 13.3581 31.0587 26.9978 86.9250 2008 78.2095 9.2682 21.7905 19.0102 87.2408 2009 82.8727 4.6632 17.1273 15.3012 89.3380 2010 86.3178 3.4451 13.6822 12.6328 92.3302 2011 91.0834 4.7656 8.9166 8.4543 94.8160

2012 and later years 4.7656 4.1510 4.0373 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 97.1845 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Miscellaneous Casualty

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 79.7790 79.7790 20.2210 19.2759 95.3259 2003 94.9417 15.1627 5.0583 4.7869 94.6349

2004 and later years 2.5292 2.5292 2.4599 97.2617

February 10, 2003 432 2003–6 I.R.B.

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

(Ocean Marine, Aircraft (All Perils), Boiler and Machinery))

Estimated Cumulative

Estimated Losses Paid

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Factors

Tax Year

Paid

(%)

2002 59.7445 59.7445 40.2555 36.3785 90.3691 2003 81.0347 21.2902 18.9653 16.5661 87.3498 2004 87.3325 6.2978 12.6675 11.0369 87.1282 2005 91.0659 3.7334 8.9341 7.8286 87.6268 2006 95.1781 4.1122 4.8219 4.0477 83.9442 2007 95.7605 0.5824 4.2395 3.6800 86.8035 2008 97.0539 1.2933 2.9461 2.5604 86.9067 2009 97.6441 0.5903 2.3559 2.0997 89.1265 2010 98.7037 1.0596 1.2963 1.1302 87.1862 2011 98.6217 -0.0821 1.3783 1.2791 92.7987

2012 0.5226 0.8558 0.8148 95.2164 2013 and later years 0.5226 0.3332 0.3240 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 95.2688 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Other (Including Credit)

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 69.1729 69.1729 30.8271 29.3033 95.0568 2003 91.2168 22.0439 8.7832 8.3120 94.6349

2004 and later years 4.3916 4.3916 4.2714 97.2617

2003–6 I.R.B. 433 February 10, 2003

Other Liability — Claims-Made

Estimated Cumulative

Estimated Losses Paid

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Factors

Tax Year

Paid

(%)

2002 14.9618 14.9618 85.0382 71.8257 84.4629 2003 36.2113 21.2494 63.7887 54.0793 84.7787 2004 54.2876 18.0763 45.7124 38.5820 84.4015 2005 64.2163 9.9288 35.7837 30.5767 85.4488 2006 73.2732 9.0569 26.7268 23.0108 86.0964 2007 80.5748 7.3016 19.4252 16.8175 86.5760 2008 87.6200 7.0452 12.3800 10.5343 85.0912 2009 89.9155 2.2955 10.0845 8.7757 87.0214 2010 93.3946 3.4791 6.6054 5.6997 86.2886 2011 94.6170 1.2223 5.3830 4.7684 88.5817

2012 1.2223 4.1607 3.7839 90.9440 2013 1.2223 2.9383 2.7432 93.3586 2014 1.2223 1.7160 1.6431 95.7504 2015 and later years 1.2223 0.4936 0.4801 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 90.9440 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Other Liability — Occurrence

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 19.1133 19.1133 80.8867 65.8673 81.4315 2003 36.4434 17.3301 63.5566 51.8103 81.5183 2004 52.1648 15.7215 47.8352 38.6046 80.7033 2005 63.2383 11.0734 36.7617 29.4237 80.0389 2006 72.0780 8.8397 27.9220 22.0152 78.8453 2007 75.9021 3.8241 24.0979 19.3405 80.2579 2008 82.9305 7.0284 17.0695 13.2186 77.4395 2009 85.1441 2.2136 14.8559 11.6974 78.7391 2010 89.3006 4.1565 10.6994 8.0918 75.6286 2011 89.9898 0.6892 10.0102 7.8453 78.3725

February 10, 2003 434 2003–6 I.R.B.

Other Liability — Occurrence

2012 0.6892 9.3210 7.5846 81.3711 2013 0.6892 8.6318 7.3090 84.6761 2014 0.6892 7.9426 7.0178 88.3566 2015 0.6892 7.2533 6.7099 92.5073 2016 and later years 0.6892 6.5641 6.3844 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 88.5630 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Private Passenger Auto Liability/Medical

Estimated Cumulative

Estimated Losses Paid

Factors

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Tax Year

Paid

(%)

2002 43.1926 43.1926 56.8074 52.2499 91.9773 2003 72.2008 29.0082 27.7992 25.4085 91.4000 2004 84.5632 12.3625 15.4368 14.1488 91.6566 2005 91.9316 7.3684 8.0684 7.3809 91.4792 2006 95.8729 3.9413 4.1271 3.7501 90.8651 2007 97.7804 1.9075 2.2196 2.0030 90.2423 2008 98.7957 1.0153 1.2043 1.0735 89.1398 2009 99.2491 0.4535 0.7509 0.6686 89.0445 2010 99.5195 0.2703 0.4805 0.4288 89.2424 2011 99.6353 0.1159 0.3647 0.3342 91.6449

2012 0.1159 0.2488 0.2342 94.1130 2013 0.1159 0.1330 0.1284 96.5863 2014 and later years 0.1159 0.0171 0.0166 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 95.0993 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Products Liability — Claims-Made

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 6.5804 6.5804 93.4196 75.6441 80.9723 2003 26.7183 20.1379 73.2817 59.2585 80.8639 2004 43.1834 16.4652 56.8166 45.7134 80.4579 2005 43.9209 0.7375 56.0791 47.5654 84.8185

2003–6 I.R.B. 435 February 10, 2003

Products Liability — Claims-Made

2006 54.3806 10.4597 45.6194 39.5272 86.6457 2007 78.3630 23.9824 21.6370 17.1267 79.1545 2008 82.8643 4.5013 17.1357 13.4765 78.6460 2009 68.2184 -14.6459 31.7816 29.3043 92.2052 2010 79.1582 10.9399 20.8418 19.7298 94.6644 2011 89.6963 10.5381 10.3037 10.0215 97.2617

2012 and later years 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 90.3597 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Products Liability — Occurrence

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 9.4198 9.4198 90.5802 71.8513 79.3234 2003 20.5845 11.1647 79.4155 64.4750 81.1869 2004 36.7807 16.1962 63.2193 51.5043 81.4693 2005 55.5974 18.8167 44.4026 35.0987 79.0466 2006 66.6238 11.0263 33.3762 25.7661 77.1990 2007 77.2636 10.6399 22.7364 16.2979 71.6822 2008 79.1888 1.9251 20.8112 15.2492 73.2740 2009 83.6816 4.4928 16.3184 11.5007 70.4765 2010 85.5507 1.8691 14.4493 10.2356 70.8380 2011 85.7291 0.1784 14.2709 10.6366 74.5336

2012 0.1784 14.0925 11.0605 78.4854 2013 0.1784 13.9141 11.5087 82.7124 2014 0.1784 13.7357 11.9824 87.2355 2015 0.1784 13.5573 12.4832 92.0772 2016 and later years 0.1784 13.3789 13.0126 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 87.5350 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

February 10, 2003 436 2003–6 I.R.B.

Reinsurance A (Nonproportional Assumed Property)

Estimated Cumulative

Estimated Losses Paid

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Factors

Tax Year

Paid

(%)

2002 25.0571 25.0571 74.9429 67.5012 90.0701 2003 52.0402 26.9831 47.9598 43.6127 90.9360 2004 82.4709 30.4307 17.5291 14.8155 84.5198 2005 85.6387 3.1678 14.3613 12.4045 86.3747 2006 92.7228 7.0840 7.2772 5.8293 80.1036 2007 91.8604 -0.8624 8.1396 7.0488 86.5992 2008 96.5016 4.6412 3.4984 2.6795 76.5908 2009 96.1872 -0.3143 3.8128 3.1557 82.7657 2010 97.6206 1.4333 2.3794 1.8622 78.2609 2011 97.8419 0.2214 2.1581 1.7409 80.6694

2012 0.2214 1.9367 1.6127 83.2710 2013 0.2214 1.7154 1.4772 86.1173 2014 0.2214 1.4940 1.3340 89.2892 2015 0.2214 1.2727 1.1826 92.9218 2016 and later years 0.2214 1.0513 1.0225 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 91.2226 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Reinsurance B (Nonproportional Assumed Liability)

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 8.9223 8.9223 91.0777 71.5358 78.5436 2003 27.3618 18.4395 72.6382 56.6618 78.0055 2004 44.5758 17.2140 55.4242 42.1986 76.1374 2005 53.8781 9.3023 46.1219 35.0439 75.9810 2006 60.8896 7.0115 39.1104 29.8360 76.2865 2007 69.7327 8.8430 30.2673 22.4476 74.1644 2008 76.6292 6.8965 23.3708 16.6387 71.1942 2009 79.4030 2.7738 20.5970 14.7368 71.5484 2010 83.8936 4.4906 16.1064 10.9612 68.0553 2011 80.1707 -3.7229 19.8293 15.4148 77.7378

2003–6 I.R.B. 437 February 10, 2003

Reinsurance B (Nonproportional Assumed Liability)

2012 1.1805 18.6487 15.0812 80.8701 2013 1.1805 17.4682 14.7286 84.3167 2014 1.1805 16.2877 14.3559 88.1394 2015 1.1805 15.1072 13.9618 92.4186 2016 and later years 1.1805 13.9266 13.5453 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 90.3328 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

Reinsurance C (Nonproportional Assumed Financial Lines)

Estimated Cumulative

Estimated Losses Paid

Factors

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Tax Year

Paid

(%)

2002 17.1195 17.1195 82.8805 71.6629 86.4654 2003 46.6590 29.5395 53.3410 45.3837 85.0823 2004 67.7135 21.0545 32.2865 26.3279 81.5446 2005 78.1379 10.4244 21.8621 17.1133 78.2786 2006 89.7346 11.5967 10.2654 6.1673 60.0786 2007 92.1268 2.3921 7.8732 4.0600 51.5667 2008 89.7323 -2.3945 10.2677 6.7537 65.7759 2009 90.0460 0.3137 9.9540 6.8167 68.4827 2010 94.8867 4.8407 5.1133 2.2290 43.5925 2011 86.7041 -8.1827 13.2959 10.7693 80.9970

Taxpayers that do not use the composite method of Notice 88-100 should use the following factors to discount unpaid losses that are incurred in this line of business in the 2002 accident year and that are outstanding at the end of the tax year shown.

2012 1.4277 11.8683 9.9164 83.5537 2013 1.4277 10.4406 9.0147 86.3430 2014 1.4277 9.0129 8.0616 89.4449 2015 1.4277 7.5852 7.0540 92.9969 2016 and later years 1.4277 6.1575 5.9889 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 83.5537 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

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

Estimated Cumulative

Estimated Losses Paid

Unpaid Losses at Year End

(%)

Discounted

Unpaid Losses at Year End

(%)

Discount

Factors

(%)

Losses

Each Year

(%)

Tax Year

Paid

(%)

2002 62.9320 62.9320 37.0680 35.1627 94.8599 2003 88.4950 25.5631 11.5050 10.8877 94.6349

February 10, 2003 438 2003–6 I.R.B.

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

2004 and later years 5.7525 5.7525 5.5950 97.2617

Workers’ Compensation

Estimated Cumulative

Estimated Losses Paid

Factors

(%)

Discounted

Unpaid Losses at Year End

(%)

Losses

Each Year

(%)

Discount

Tax Year

Paid

(%)

2002 28.2489 28.2489 71.7511 61.5953 85.8458 2003 57.8739 29.6249 42.1261 34.6534 82.2611 2004 71.2999 13.4260 28.7001 22.8281 79.5402 2005 77.7584 6.4585 22.2416 17.4913 78.6421 2006 81.9301 4.1717 18.0699 14.2009 78.5885 2007 83.7739 1.8437 16.2261 13.1161 80.8329 2008 86.5350 2.7611 13.4650 11.0261 81.8872 2009 88.4367 1.9017 11.5633 9.7005 83.8901 2010 89.5926 1.1559 10.4074 9.0659 87.1103 2011 91.6441 2.0515 8.3559 7.4743 89.4497

2012 2.0515 6.3045 5.7919 91.8701 2013 2.0515 4.2530 4.0134 94.3668 2014 2.0515 2.2016 2.1334 96.9035 2015 and later years 2.0515 0.1501 0.1460 97.2617

Taxpayers that use the composite method of Notice 88–100 should use 89.5412 percent to discount unpaid losses that are incurred in this line of business in 2002 and that are outstanding at the end of the 2012 tax year.

DRAFTING INFORMATION

The principal author of this revenue procedure is Katherine A. Hossofsky of the Office of the Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Hossofsky at (202) 622–3577 (not a toll-free call).

26 CFR 601.201: Rulings and determination let- ters. (Also Part I, sections 832, 846; 1.832–4, 1.846–1.)

Rev. Proc. 2003–18