SECTION 3. DISCOUNT FACTORS

FOR THE 2025 ACCIDENT YEAR

.01 The tables in this section 3 present separately for each line of business the discount factors for losses incurred in the 2025 accident year for use by insurance companies in computing discounted unpaid losses under § 846 and estimated salvage recoverable under § 832. The discount factors presented in this section are generally determined by using the applicable interest rate for 2025 under § 846(c), which is 3.57 percent, compounded semiannually. The exceptions are the discount

factors for long-tail lines of business determined using the composite method described in section V of Notice 88-100, 1988-2 C.B. 439. See section 3.02 of this revenue procedure. All discount factors are determined by assuming all loss payments occur in the middle of the calendar year.

.02 Section V of Notice 88-100 sets forth a composite method for computing discounted unpaid losses for accident years that are not separately reported on the annual statement. Tables 1 and 2 separately provide discount factors for insurance companies that have elected to use the composite method of Notice 88-100. See Rev. Proc. 2002-74, 2002-2 C.B. 980. The discount factors computed using the composite method are unrelated to the composite discount factors referred to in § 1.8461(b)(1)(ii) and (4), which apply 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 1, part B) and “LongTail Composite” (in Table 2, 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.

1 Unless otherwise specified, all “section” or “§” references are to sections of the Internal Revenue Code or the Income Tax Regulations (26 CFR part 1).

Bulletin No. 2026–9 563 February 23, 2026

Discount Factors for 2025 2025 Interest Rate (using semi-annual compounding): 3.57%

Table 1 (part A) Discount Factors Under Section 846 (percent) For Losses Incurred in Accident Year 2025 in Short-Tail Lines of Business

Taxable Year

Beginning in

Auto Physical

Damage Fidelity/Surety

Financial Guaranty/

Mortgage Guaranty International Other*

2025 98.0171 94.8069 94.2020 94.9732 96.3288

2026 96.5385 96.5385 96.5385 96.5385 96.5385

Taxpayer Not Using Composite Method

Years after 2026 98.2463 98.2463 98.2463 98.2463 98.2463

Taxpayer Using the Composite Method

2027 98.2463 98.2463 98.2463 98.2463 98.2463

Years after 2027

Use composite method discount factors published for the accident year that is two years prior to the specifed taxable year.

*** For the Accident and Health line of business (other than disability income or credit disability insurance), the discount** factor for taxable year 2025 is 98.2463 percent. This is also the discount factor used in later taxable years for taxpayers not using the composite method. For taxpayers using the composite method, the discount factor for losses incurred in 2025 is the discount factor published for the Accident and Health line of business for losses incurred in the accident year coinciding with the taxable year.

February 23, 2026 564 Bulletin No. 2026–9

Table 1 (part B) Discount Factors Under Section 846 (percent) For Losses Incurred in Accident Year 2025 in Short-Tail Lines of Business

Reinsurance - Nonproportional

Liability

Reinsurance - Nonproportional

Assumed Property

Special Property (Fire, Allied Lines,

Inland Marine,

Earthquake, Burglary, Theft,

Pet) Warranty

Taxable Year

Beginning in

Reinsurance - Nonproportional

Assumed Financial Lines

Assumed

Short-Tail Composite

2025 94.9406 93.8058 95.3714 97.0553 98.0069 96.6054

2026 96.5385 96.5385 96.5385 96.5385 96.5385 96.5385

Taxpayer Not Using Composite Method

Years after 2026 98.2463 98.2463 98.2463 98.2463 98.2463 98.2463

Taxpayer Using the Composite Method

2027 98.2463 98.2463 98.2463 98.2463 98.2463 98.2463

Years after 2027

Use composite method discount factors published for the accident year that is two years prior to the specifed taxable year.

Bulletin No. 2026–9 565 February 23, 2026

Table 2 (part A) Discount Factors Under Section 846 (percent) For Losses Incurred in Accident Year 2025 in Long-Tail Lines of Business

Medical Professional

Liability - Occurrence

Multiple Peril Lines

Medical Professional

Liability - Claims-Made

Other Liability - Occurrence

Taxable Year

Beginning in

Commercial

Auto/Truck Liability/Medical

Other Liability - Claims-Made

2025 92.7912 89.9549 84.2073 94.4611 89.6344 87.9606

2026 93.5133 91.2521 86.4746 92.5690 90.7627 88.9863

2027 94.1823 91.6347 88.1348 92.6080 90.8107 89.8289

2028 94.5524 92.6662 89.7767 92.5264 91.0559 90.2447

2029 94.4332 92.4552 90.7378 92.2615 90.9686 90.6061

2030 93.8646 93.2174 91.1974 92.5637 91.0111 89.3763

2031 93.8845 92.6918 91.6531 92.6495 90.5663 89.3393

2032 94.4510 93.7328 91.4746 94.7671 92.5852 90.2206

2033 95.6118 95.3263 93.6570 95.7661 95.6185 91.4060

2034 97.8620 97.0999 95.6841 97.5155 96.3278 93.6044

Taxpayer Not Using Composite Method

2035 98.2463 98.2463 97.2501 98.2463 97.9703 95.2097

2036 98.2463 98.2463 98.2463 98.2463 98.2463 96.8131

Years after 2036 98.2463 98.2463 98.2463 98.2463 98.2463 98.2463

Taxpayer Using the Composite Method

2035 98.2463 98.2463 97.5177 98.2463 98.0050 96.3273

Years after 2035

Use composite method discount factors published for the accident year that is ten years prior to the specifed taxable year.

February 23, 2026 566 Bulletin No. 2026–9

Table 2 (part B) Discount Factors Under Section 846 (percent) For Losses Incurred in Accident Year 2025 in Long-Tail Lines of Business

Products Liability - Claims-Made

Products Liability - Occurrence

Workers' Compensation

Taxable Year Beginning in

Private Passenger Auto Liability/

Medical

Long-Tail Composite

2025 94.9556 86.9550 86.1793 86.7823 92.0262

2026 94.5489 88.5282 87.8134 85.0171 91.1814

2027 94.6490 88.8084 89.1375 84.3111 90.8933

2028 94.5543 87.6563 89.8227 83.7305 90.1230

2029 93.4742 89.4311 90.2047 84.0629 89.7600

2030 92.7233 91.3355 90.7591 83.3153 89.1923

2031 93.4032 93.4192 91.8587 83.9937 89.4663

2032 93.5712 93.9397 92.1985 85.7493 91.0189

2033 94.4679 95.4488 93.4239 87.4231 92.6313

2034 97.0779 97.4692 95.8540 88.5091 94.1737

Taxpayer Not Using Composite Method

2035 98.2463 98.2463 97.4244 90.0263 95.7770

2036 98.2463 98.2463 98.2463 91.5785 97.3442

2037 98.2463 98.2463 98.2463 93.1661 98.2463

2038 98.2463 98.2463 98.2463 94.7893 98.2463

2039 98.2463 98.2463 98.2463 96.4458 98.2463

2040 98.2463 98.2463 98.2463 98.1221 98.2463

Years after 2040 98.2463 98.2463 98.2463 98.2463 98.2463

Taxpayer Using the Composite Method

2035 98.2463 98.3230 97.6204 93.4950 96.8705

Years after 2035

Use composite method discount factors published for the accident year that is ten years prior to the specifed taxable year.

Bulletin No. 2026–9 567 February 23, 2026