SECTION 4. DISCOUNT FACTORS

FOR TAXABLE YEARS BEGINNING IN 2020

.01 The tables in this section 4 present separately for each line of business discount factors for losses incurred in the 2020 accident year and earlier accident years for use by insurance companies in computing discounted unpaid losses under § 846 and estimated salvage recoverable under § 832 in taxable years beginning in 2020. The discount factors for losses incurred in accident years 2019 and 2020

presented in these tables are determined by using the applicable interest rate for 2019 (3.09 percent, compounded semiannually) and 2020 (3.08 percent, compounded semiannually), respectively, under § 846(c). All other discount factors presented in these tables are determined by using the applicable interest rate for 2018, which is 2.94 percent, compounded semiannually. All of the discount factors presented in these tables are determined by using the payment patterns for the 2017 determination year determined by the Secretary under § 846(d) and by assuming all

loss payments occur in the middle of the calendar year. See Rev. Proc. 2019-31 (prescribing discount factors for the 2019 accident year and “Revised Discount Factors” for accident years beginning before 2019). .02 Table 4 separately provides discount factors for insurance companies that have elected to use the composite method of Notice 88-100. See Rev. Proc. 200274. The discount factors computed using the composite method are unrelated to the composite discount factors referred to in § 1.846-1(b)(1)(ii) and (4), which apply

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to lines of business for which the Secretary has not published discount factors. The composite discount factors for use with respect to such lines of business are

labelled “Short-Tail Composite” (in Table 3, part B) and “Long-Tail Composite” (in Table 4, part B). The “Miscellaneous Casualty” discount factors referenced in

§ 1.846-1(b)(2) are not set forth in tables, but are equivalent to the “Short-Tail Composite” discount factors.

Table 3 (part A) Discount Factors Under Section 846 (percent)

For Taxable Year(s) Beginning in 2020

Short-Tail Lines of Business

Accident Auto Physical Mortgage

Year Damage Fidelity/Surety Guaranty International Other*

2020 98.3139 95.8052 95.5582 96.1310 96.9677 2019 96.9916 96.9916 96.9916 96.9916 96.9916 Years before 2019 98.5513 98.5513 98.5513 98.5513 98.5513

For Accident and Health lines of business (other than disability income or credit disability insurance), the discount* factor for taxable year 2020 is 98.4834 percent.

Accident

Auto Physical

Damage Fidelity/Surety

Financial Guaranty/

Year

Table 3 (part B) Discount Factors Under Section 846 (percent)

For Taxable Year(s) Beginning in 2020

Short-Tail Lines of Business

Special Property

Reinsurance - Nonproportional

Reinsurance - Nonproportional

Assumed

Reinsurance - Nonproportional

Assumed Property

Earthquake, Burglary & Theft) Warranty

(Fire, Allied Lines, Inland Marine,

Assumed Assumed Assumed Earthquake, Short-Tail

Accident Year Financial Lines Liability Property Burglary & Theft) Warranty Composite

2020 95.4035 94.6016 96.1125 97.3985 98.1106 96.8566 2019 96.9916 96.9916 96.9916 96.9916 96.9916 96.9916 Years before 2019 98.5513 98.5513 98.5513 98.5513 98.5513 98.5513

Liability

Accident Year

Assumed Financial Lines

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Table 4 (part A) Discount Factors Under Section 846 (percent)

For Taxable Year(s) Beginning in 2020

Long-Tail Lines of Business

Commercial

Auto/Truck

Medical Professional

Liability - Claims-Made

Medical Professional

Liability - Occurrence

Multiple Peril

Auto/Truck Professional Professional Other Other

Liability/ Liability - Liability - Multiple Peril Liability - Liability -

Medical Claims-Made Occurrence Lines Claims-Made Occurrence

2020 93.7894 91.2887 86.3302 95.0975 90.4958 88.9133 2019 94.5084 92.2917 88.4392 93.3741 91.3061 89.7544 2018 95.2819 92.8576 90.4811 93.9651 92.1992 90.7535 2017 95.3204 93.1388 91.8194 93.2041 92.2415 90.9196 2016 95.2024 93.2805 92.7664 91.4064 92.0976 90.6836 2015 95.0498 93.3035 93.5069 91.6039 92.6040 90.7542 2014 95.3260 94.2423 94.3189 91.3154 93.0770 90.7788 2013 94.9804 95.1291 94.9993 91.0177 93.8378 91.9830 2012 96.4102 96.0160 96.1220 93.5200 94.9264 92.6228 2011 98.3585 97.7503 97.7902 94.8530 96.6876 94.4974

Lines

Other Liability - Claims-Made

Accident Year

Liability/

Medical

Taxpayer Not Using the Composite Method

2010 98.5513 98.5513 98.5513 96.1895 98.0033 95.8511 2009 98.5513 98.5513 98.5513 97.5045 98.5513 97.2176 Years before

2009 98.5513 98.5513 98.5513 98.5513 98.5513 98.5513

Taxpayer Using the Composite Method

Years before

2011 98.5513 98.5513 98.5513 96.9185 98.0920 96.7300

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Table 4 (part B) Discount Factors Under Section 846 (percent)

For Taxable Year(s) Beginning in 2020

Long-Tail Lines of Business

Products Liability - Claims-Made

Products Liability - Occurrence

Workers' Compensation

Auto Liability/ Liability - Liability - Workers' Long-Tail

Medical Claims-Made Occurrence Compensation Composite

2020 95.4796 85.3166 87.3013 87.5556 92.4450 2019 95.0654 85.7548 88.6442 85.9577 91.3501 2018 95.2520 88.1407 89.8860 85.4517 91.4469 2017 94.8920 83.8076 91.1924 83.9662 90.2933 2016 94.2325 85.0889 89.8810 83.4129 88.7546 2015 94.2824 86.4184 89.9309 82.8905 88.6421 2014 94.5205 87.8040 90.8527 83.2567 88.6258 2013 95.0550 89.0388 91.8072 84.1036 89.1661 2012 95.6473 90.2969 92.1992 84.7150 90.3858 2011 97.7282 91.5785 94.4133 86.5946 92.1457

Accident Year

Private Passenger Auto Liability/

Medical

Taxpayer Not Using the Composite Method

2010 98.5513 92.8838 95.7739 87.8065 93.4541 2009 98.5513 94.2124 97.1571 89.0414 94.7812 2008 98.5513 95.5629 98.5513 90.2995 96.1195 2007 98.5513 96.9299 98.5513 91.5813 97.4421 2006 98.5513 98.2868 98.5513 92.8867 98.5513 2005 98.5513 98.5513 98.5513 94.2154 98.5513 2004 98.5513 98.5513 98.5513 95.5661 98.5513 2003 98.5513 98.5513 98.5513 96.9334 98.5513 2002 98.5513 98.5513 98.5513 98.2913 98.5513 Years before 2002 98.5513 98.5513 98.5513 98.5513 98.5513

Taxpayer Using the Composite Method

Years before 2011 98.5513 94.7288 96.6903 91.2579 95.0968