SEC. 4. APPLICATION

.01 The following tables present separately for each line of business the discount factors under § 832 for 2007. All the discount factors presented in this section were determined using the applicable interest rate under § 846(c) for 2007, which is 3.97 percent, and by assuming all estimated salvage is recovered in the middle of the calendar year

.02 Section V of Notice 88–100, 1988–2 C.B. 439, sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. Rev. Proc. 2002–74, section 3.03, 2002–2 C.B. 980, provides that an insurance company that elects to use the composite method of Notice 88–100 must use the same method to compute discounted estimated salvage recoverable. Accordingly, the tables separately provide discount factors for taxpayers who elect to use the composite method of section V of Notice 88–100.

2008–3 I.R.B. 301 January 22, 2008

.02 These tables must be used by taxpayers irrespective of whether they elected to discount unpaid losses using their own experience under § 846(e).

.03 Tables.

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 98.0722 percent to discount salvage recoverable with respect to losses incurred in this line of business in the 2007 accident year as of the end of the 2007 and later taxable years.

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount all salvage recoverable in this line of business as of the end of the 2007 taxable year.

Auto Physical Damage

2007 92.5072 2008 92.4531 2009 92.7905 2010 93.1328 2011 93.8564 2012 93.6497 2013 92.1165 2014 93.0132 2015 96.3177 2016 98.0722

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Taxpayers that use the composite method of Notice 88–100 should use 95.5806 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Fidelity/Surety

Commercial Auto/Truck Liability/Medical

Tax Year

Discount Factors (%)

Composite

2016 96.3399

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2017 and later years

98.0722

Tax Year

Discount Factors (%)

98.0722

Tax Year

Discount Factors (%)

2007 97.2919 2008 96.1998

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2017 and later years

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Composite

2007 93.8272 2008 96.1998

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2009 and later years

2009 and later years

98.0722

98.0722

Tax Year

Discount Factors (%)

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2009 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

2007 92.5224 2008 92.2753 2009 92.1017 2010 91.9308 2011 91.3215 2012 90.4149 2013 91.2470 2014 92.5673 2015 94.5527

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2009 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

January 22, 2008 302 2008–3 I.R.B.

Medical Malpractice — Occurrence

Financial Guaranty/Mortgage Guaranty

International (Composite)

2017 and later years

98.0722

Tax Year

Discount Factors (%)

Tax Year

Discount Factors (%)

2007 94.8523 2008 96.1998

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Taxpayers that use the composite method of Notice 88–100 should use 95.5806 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Medical Malpractice — Claims-Made

Tax Year

Discount Factors (%)

2009 and later years

98.0722

2007 85.8039 2008 90.1315 2009 92.4448 2010 84.5882 2011 94.8975 2012 91.5995 2013 93.1599 2014 95.9622 2015 97.1608 2016 98.0722

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Miscellaneous Casualty

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2009 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

International (Composite)

2017 and later years

98.0722

Tax Year

Discount Factors (%)

2007 92.5224 2008 92.2753 2009 92.1017 2010 91.9308 2011 91.3215 2012 90.4149 2013 91.2470 2014 92.5673 2015 94.5527 2016 96.3399

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2007 92.8129 2008 93.8690 2009 92.3083 2010 92.9226 2011 92.2409 2012 87.9349 2013 84.6380 2014 90.4891 2015 96.5200 2016 98.0722

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2017 and later years

98.0722

Tax Year

Discount Factors (%)

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

2007 96.6559 2008 96.1998

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2008–3 I.R.B. 303 January 22, 2008

Other Liability — Claims-Made

Miscellaneous Casualty

Other (Including Credit)

98.0722

2019 and later years

2009 and later years

98.0722

Tax Year

Discount Factors (%)

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2009 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

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

2007 95.7364 2008 96.1998

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Taxpayers that use the composite method of Notice 88–100 should use 96.8697 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Other Liability — Occurrence

Tax Year

Discount Factors (%)

98.0722

2009 and later years

Tax Year

Discount Factors (%)

2007 93.1480 2008 92.5520 2009 92.4746 2010 92.4125 2011 91.6181 2012 90.0772 2013 91.2078 2014 93.5843 2015 94.9567 2016 96.6862

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2009 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Other Liability — Claims-Made

Tax Year

Discount Factors (%)

2007 87.3760 2008 88.3943 2009 90.6775 2010 91.4222 2011 90.8722 2012 90.9863 2013 90.4663 2014 93.1478 2015 95.8515 2016 97.6241

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2017 and later years

98.0722

2017 and later years

98.0722

Taxpayers that use the composite method of Notice 88–100 should use 98.0719 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

2007 88.6489 2008 89.7449 2009 87.8992 2010 91.0630 2011 92.5154 2012 94.3565 2013 93.3084 2014 91.9440 2015 97.4177 2016 98.0722

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

January 22, 2008 304 2008–3 I.R.B.

Products Liability — Occurrence

Private Passenger Auto Liability/Medical

98.0722

2017 and later years

Tax Year

Discount Factors (%)

2007 94.6456 2008 94.6698 2009 94.4266 2010 93.5793 2011 93.0072 2012 92.2508 2013 93.1304 2014 94.6575 2015 94.7279 2016 96.4851

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Products Liability — Claims-Made

Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2017 94.6739 2018 96.4396 2019 and later 98.0722 years

Taxpayers that use the composite method of Notice 88–100 should use 94.6739 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Products Liability — Occurrence

Taxpayers that use the composite method of Notice 88–100 should use 94.6056 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Reinsurance — Nonproportional Assumed Property

Tax Year

Discount Factors (%)

2017 and later years

98.0722

Tax Year

Discount Factors (%)

Taxpayers that use the composite method of Notice 88–100 should use 98.0708 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Products Liability — Claims-Made

2007 87.8817 2008 89.9255 2009 91.7722 2010 92.5755 2011 93.0145 2012 90.6124 2013 91.2345 2014 94.1309 2015 94.3955 2016 96.2156

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2007 91.2766 2008 92.8906 2009 95.7836 2010 80.5177 2011 90.0569 2012 81.8877 2013 52.3517 2014 92.9805 2015 73.8412 2016 88.3425

Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2017 90.0606

2018 91.8464

2019 93.7215

2020 95.7382

Taxpayers that use the composite method of Notice 88–100 should use 90.0606 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Tax Year

Discount Factors (%)

2007 89.1458 2008 52.2690 2009 54.6584 2010 90.8903 2011 80.5163 2012 91.5977 2013 60.2981 2014 90.6932 2015 91.8054 2016 92.9177

2021 and later years

98.0722

2008–3 I.R.B. 305 January 22, 2008

Workers’ Compensation

Reinsurance — Nonproportional Assumed Liability

Tax Year

Discount Factors (%)

Tax Year

Discount Factors (%)

2007 87.0242 2008 90.2399 2009 91.6689 2010 88.8580 2011 90.8909 2012 91.7421 2013 91.6386 2014 93.3665 2015 95.2650 2016 96.9798

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Reinsurance — Nonproportional Assumed Financial Lines

2016 98.0722

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

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

2017 and later years

98.0722

2017 and later years

98.0722

Tax Year

Discount Factors (%)

Taxpayers that use the composite method of Notice 88–100 should use 93.1607 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

Reinsurance — Nonproportional Assumed Financial Lines

2007 94.9917 2008 96.1998

Taxpayers that do not use the composite method of Notice 88–100 should use the following factor to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2007 88.6073 2008 90.6085 2009 91.3932 2010 91.3110 2011 89.8407 2012 88.4546 2013 89.0394 2014 88.7616 2015 90.9000 2016 92.6321

Taxpayers that do not use the composite method of Notice 88–100 should use the following factors to discount salvage recoverable as of the end of the tax year shown with respect to losses incurred in this line of business in the 2007 accident year.

2017 94.4075 2018 96.2249 2019 and later 98.0722 years

Taxpayers that use the composite method of Notice 88–100 should use 95.3569 percent to discount salvage recoverable as of the end of the 2017 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

DRAFTING INFORMATION

The principal author of this revenue procedure is Katherine A. Hossofsky of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Ms. Hossofsky at (202) 622–8435 (not a toll-free call).

Tax Year

Discount Factors (%)

2009 and later years

98.0722

2007 87.4122 2008 86.1745 2009 90.1030 2010 78.9216 2011 90.4446 2012 80.6766 2013 90.6123 2014 91.0121 2015 97.5684

Taxpayers that use the composite method of Notice 88–100 should use 98.0722 percent to discount salvage recoverable as of the end of the 2009 taxable year with respect to losses incurred in this line of business in 2007 and prior years.

January 22, 2008 306 2008–3 I.R.B.