IRS RELEASES 1993 DISCOUNTED UNPAID LOSS FACTORS.
JUL. 2, 1993
Rev. Proc. 93-29; 1993-2 C.B. 344
DOCUMENT ATTRIBUTES
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
26 CFR 601.201: Rulings and determination letters
(Also Part I, Sections 846; 1.846-1.)
- Code Sections
- Subject Areas/Tax Topics
- Index Termsinsurance companies, losses, discounted unpaid
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 93-7451 (21 original pages)
- Tax Analysts Electronic Citation93 TNT 141-16
Citations: Rev. Proc. 93-29; 1993-2 C.B. 344
Rev. Proc. 93-29
SECTION 1. PURPOSE
This revenue procedure prescribes the loss payment patterns and discount factors for the 1993 accident year. These factors will be used for computing discounted unpaid losses under section 846 of the Internal Revenue Code. See Rev. Proc. 92-47, 1992-1 C.B. 980, for background concerning the loss payment patterns and application of the discount factors.
SEC. 2. SCOPE
This revenue procedure applies to any taxpayer that is required to discount its unpaid losses under section 846 for a line of business using discount factors published by the Secretary.
SEC. 3. TABLES OF DISCOUNT FACTORS
.01 The following tables present separately for each line of business the discount factors under section 846 for accident year 1993. All the discount factors presented in this section were determined using the applicable interest rate under section 846(c) for 1993, which is 8.10 percent, and by assuming all loss payments occur in the middle of the calendar year.
.02 If the groupings of individual lines of business on the annual statement changes, taxpayers must discount the unpaid losses on the resulting lines of business in accordance with the discounting patterns that would have applied to those unpaid losses based on their classification on the 1990 annual statement.
.03 Tables
Tables of Unpaid Loss Discount Factors
Section 846
- 1993 -
Interest rate: 8.1 percent
Homeowners/Farmowners
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 66.8753 66.8753 30.1601 33.1247 91.0503
AY+ 1 90.4633 23.5880 8.0784 9.5367 84.7086
AY+ 2 93.3914 2.9281 5.6883 6.6086 86.0753
AY+ 3 95.7081 2.3167 3.7404 4.2919 87.1510
AY+ 4 97.4081 1.7000 2.2759 2.5919 87.8081
AY+ 5 98.6271 1.2190 1.1929 1.3729 86.8849
AY+ 6 99.1528 0.5257 0.7429 0.8472 87.6872
AY+ 7 99.5425 0.3897 0.3979 0.4575 86.9692
AY+ 8 99.7318 0.1893 0.2333 0.2682 86.9869
AY+ 9 99.8063 0.0745 0.1747 0.1937 90.2093
AY+10 N/A 0.0745 0.1114 0.1192 93.4801
AY+11 N/A 0.0745 0.0430 0.0447 96.1805
AY+12 N/A 0.0447 0.0000 0.0000 N/A
_____________________________________________________________________
Private Passenger Auto Liability/Medical
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 34.7617 34.7617 57.7089 65.2383 88.4585
AY+ 1 66.2963 31.5346 29.5964 33.7037 87.8134
AY+ 2 81.2140 14.9177 16.4835 18.7860 87.7439
AY+ 3 89.8272 8.6132 8.8635 10.1728 87.1294
AY+ 4 94.4549 4.6277 4.7700 5.5451 86.0212
AY+ 5 96.8788 2.4239 2.6361 3.1212 84.4601
AY+ 6 98.1526 1.2738 1.5253 1.8474 82.5653
AY+ 7 98.6962 0.5436 1.0837 1.3038 83.1167
AY+ 8 99.0485 0.3523 0.8052 0.9515 84.6210
AY+ 9 99.2667 0.2182 0.6435 0.7333 87.7570
AY+10 N/A 0.2182 0.4688 0.5151 91.0080
AY+11 N/A 0.2182 0.2799 0.2969 94.2703
AY+12 N/A 0.2182 0.0757 0.0787 96.1805
AY+13 N/A 0.0787 0.0000 0.0000 N/A
_____________________________________________________________________
Commercial Auto/Truck Liability/Medical
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 20.8439 20.8439 67.1321 79.1561 84.8098
AY+ 1 47.3136 26.4697 45.0490 52.6864 85.5040
AY+ 2 65.6475 18.3340 29.6360 34.3525 86.2702
AY+ 3 79.0481 13.4005 18.1038 20.9519 86.4062
AY+ 4 86.8945 7.8465 11.4121 13.1055 87.0791
AY+ 5 92.4503 5.5558 6.5601 7.5497 86.8922
AY+ 6 95.5751 3.1247 3.8426 4.4249 86.8400
AY+ 7 97.3052 1.7302 2.3550 2.6948 87.3913
AY+ 8 98.1469 0.8417 1.6706 1.8531 90.1546
AY+ 9 98.8549 0.7080 1.0699 1.1451 93.4296
AY+10 N/A 0.7080 0.4204 0.4371 96.1805
AY+11 N/A 0.4371 0.0000 0.0000 N/A
_____________________________________________________________________
Workers' Compensation
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 22.3366 22.3366 62.1095 77.6634 79.9727
AY+ 1 50.6941 28.3575 37.6568 49.3059 76.3738
AY+ 2 66.1886 15.4945 24.5971 33.8114 72.7481
AY+ 3 74.4228 8.2342 18.0283 25.5772 70.4859
AY+ 4 79.5663 5.1434 14.1409 20.4337 69.2037
AY+ 5 83.7227 4.1564 10.9648 16.2773 67.3626
AY+ 6 86.1316 2.4089 9.3484 13.8684 67.4080
AY+ 7 88.4452 2.3136 7.7001 11.5548 66.6403
AY+ 8 88.9625 0.5173 7.7860 11.0375 70.5415
AY+ 9 89.9266 0.9641 7.4143 10.0734 73.6028
AY+10 N/A 0.9641 7.0125 9.1093 76.9816
AY+11 N/A 0.9641 6.5782 8.1453 80.7606
AY+12 N/A 0.9641 6.1086 7.1812 85.0644
AY+13 N/A 0.9641 5.6011 6.2171 90.0912
AY+14 N/A 0.9641 5.0524 5.2530 96.1805
AY+15 N/A 5.2530 0.0000 0.0000 N/A
_____________________________________________________________________
Commercial Multiple Peril
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 33.4193 33.4193 55.0330 66.5807 82.6561
AY+ 1 59.1296 25.7103 32.7594 40.8704 80.1543
AY+ 2 67.4080 8.2784 26.8058 32.5920 82.2464
AY+ 3 75.7571 8.3491 20.2964 24.2429 83.7209
AY+ 4 83.8673 8.1102 13.5081 16.1327 83.7313
AY+ 5 89.5799 5.7126 8.6628 10.4201 83.1356
AY+ 6 93.4124 3.8325 5.3798 6.5876 81.6657
AY+ 7 95.6455 2.2331 3.4938 4.3545 80.2343
AY+ 8 96.9571 1.3116 2.4132 3.0429 79.3033
AY+ 9 97.4497 0.4926 2.0964 2.5503 82.2029
AY+10 N/A 0.4926 1.7541 2.0577 85.2441
AY+11 N/A 0.4926 1.3840 1.5651 88.4279
AY+12 N/A 0.4926 0.9839 1.0725 91.7413
AY+13 N/A 0.4926 0.5515 0.5799 95.0958
AY+14 N/A 0.4926 0.0839 0.0873 96.1805
AY+15 N/A 0.0873 0.0000 0.0000 N/A
_____________________________________________________________________
Medical Malpractice
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 3.7026 3.7026 65.4307 96.2974 67.9465
AY+ 1 11.5535 7.8510 62.5679 88.4465 70.7409
AY+ 2 21.9296 10.3761 56.8478 78.0704 72.8160
AY+ 3 32.8555 10.9259 50.0926 67.1445 74.6042
AY+ 4 46.6164 13.7609 39.8428 53.3836 74.6349
AY+ 5 60.9092 14.2928 28.2097 39.0908 72.1644
AY+ 6 69.2349 8.3257 21.8383 30.7651 70.9841
AY+ 7 71.6574 2.4225 21.0885 28.3426 74.4057
AY+ 8 73.7610 2.1036 20.6096 26.2390 78.5455
AY+ 9 77.8395 4.0786 18.0384 22.1605 81.3991
AY+10 N/A 4.0786 15.2590 18.0819 84.3882
AY+11 N/A 4.0786 12.2544 14.0033 87.5109
AY+12 N/A 4.0786 9.0065 9.9248 90.7479
AY+13 N/A 4.0786 5.4955 5.8462 94.0015
AY+14 N/A 4.0786 1.7001 1.7676 96.1805
AY+15 N/A 1.7676 0.0000 0.0000 N/A
____________________________________________________________________
Special Liability (Ocean Marine, Aircraft (all Perils),
Boiler and Machinery)
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 31.2231 31.2231 59.8151 68.7769 86.9697
AY+ 1 68.2247 37.0016 26.1891 31.7753 82.4196
AY+ 2 80.2858 12.0611 15.7703 19.7142 79.9948
AY+ 3 85.4166 5.1308 11.7131 14.5834 80.3185
AY+ 4 89.4028 3.9862 8.5175 10.5972 80.3745
AY+ 5 93.2493 3.8465 5.2081 6.7507 77.1492
AY+ 6 94.0515 0.8022 4.7959 5.9485 80.6238
AY+ 7 95.8901 1.8386 3.2727 4.1099 79.6310
AY+ 8 97.7995 1.9093 1.5526 2.2005 70.5582
AY+ 9 97.9920 0.1925 1.4782 2.0080 73.6179
AY+10 N/A 0.1925 1.3978 1.8155 76.9945
AY+11 N/A 0.1925 1.3109 1.6230 80.7708
AY+12 N/A 0.1925 1.2169 1.4304 85.0713
AY+13 N/A 0.1925 1.1153 1.2379 90.0945
AY+14 N/A 0.1925 1.0055 1.0454 96.1805
AY+15 N/A 1.0454 0.0000 0.0000 N/A
___________________________________________________________________
Other Liability
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 9.9737 9.9737 64.8824 90.0263 72.0705
AY+ 1 21.8819 11.9082 57.7568 78.1181 73.9352
AY+ 2 32.5583 10.6764 51.3347 67.4417 76.1172
AY+ 3 41.4543 8.8960 46.2436 58.5457 78.9871
AY+ 4 56.3583 14.9040 34.4934 43.6417 79.0377
AY+ 5 71.6763 15.3180 21.3611 28.3237 75.4177
AY+ 6 78.0397 6.3635 16.4752 21.9603 75.0227
AY+ 7 82.2566 4.2168 13.4254 17.7434 75.6640
AY+ 8 85.2754 3.0188 11.3741 14.7246 77.2458
AY+ 9 87.4014 2.1260 10.0851 12.5986 80.0488
AY+10 N/A 2.1260 8.6915 10.4727 82.9927
AY+11 N/A 2.1260 7.1852 8.3467 86.0839
AY+12 N/A 2.1260 5.5568 6.2207 89.3267
AY+13 N/A 2.1260 3.7965 4.0948 92.7154
AY+14 N/A 2.1260 1.8936 1.9688 96.1805
AY+15 N/A 1.9688 0.0000 0.0000 N/A
_____________________________________________________________________
Special Property (Fire, Allied Lines, Inland Marine, Earthquake,
Glass, Burglary, and Theft)
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 57.7817 57.7817 39.3766 42.2183 93.2692
AY+ 1 88.3390 30.5573 10.7954 11.6610 92.5771
AY+ 2 N/A 5.8305 5.6078 5.8305 96.1805
AY+ 3 N/A 5.8305 0.0000 0.0000 N/A
_____________________________________________________________________
Auto Physical Damage
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 84.1827 84.1827 15.0940 15.8173 95.4273
AY+ 1 98.8697 14.6870 1.0464 1.1303 92.5771
AY+ 2 N/A 0.5651 0.5436 0.5651 96.1805
AY+ 3 N/A 0.5651 0.0000 0.0000 N/A
_____________________________________________________________________
Fidelity, Surety, Financial Guaranty, Mortgage Guaranty
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 25.1728 25.1728 67.5030 74.8272 90.2119
AY+ 1 57.6281 32.4553 39.2267 42.3719 92.5771
AY+ 2 N/A 21.1859 20.3768 21.1859 96.1805
AY+ 3 N/A 21.1859 0.0000 0.0000 N/A
_____________________________________________________________________
Other (including Credit, Accident and Health)
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 63.6725 63.6725 33.7692 36.3275 92.9578
AY+ 1 88.8927 25.2202 10.2828 11.1073 92.5771
AY+ 2 N/A 5.5536 5.3415 5.5536 96.1805
AY+ 3 N/A 5.5536 0.0000 0.0000 N/A
_____________________________________________________________________
International (Composite)
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 30.8006 30.8006 56.8224 69.1994 82.1140
AY+ 1 56.9235 26.1229 34.2648 43.0765 79.5440
AY+ 2 68.6906 11.7671 24.8058 31.3094 79.2280
AY+ 3 76.7697 8.0791 18.4152 23.2303 79.2722
AY+ 4 83.5336 6.7639 12.8743 16.4664 78.1853
AY+ 5 88.9725 5.4390 8.2622 11.0275 74.9237
AY+ 6 91.6218 2.6493 6.1769 8.3782 73.7264
AY+ 7 93.4305 1.8087 4.7967 6.5695 73.0153
AY+ 8 94.3638 0.9333 4.2149 5.6362 74.7829
AY+ 9 95.0595 0.6957 3.8330 4.9405 77.5833
AY+10 N/A 0.6957 3.4202 4.2448 80.5728
AY+11 N/A 0.6957 2.9739 3.5492 83.7922
AY+12 N/A 0.6957 2.4915 2.8535 87.3145
AY+13 N/A 0.6957 1.9700 2.1578 91.2971
AY+14 N/A 0.6957 1.4063 1.4622 96.1805
AY+15 N/A 1.4622 0.0000 0.0000 N/A
____________________________________________________________________
Reinsurance A
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 35.8044 35.8044 57.7100 64.1956 89.8971
AY+ 1 72.2671 36.4628 24.4738 27.7329 88.2483
AY+ 2 79.1294 6.8622 19.3214 20.8706 92.5771
AY+ 3 N/A 10.4353 10.0367 10.4353 96.1805
AY+ 4 N/A 10.4353 0.0000 0.0000 N/A
_____________________________________________________________________
Reinsurance B (Composite)
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 30.8006 30.8006 56.8224 69.1994 82.1140
AY+ 1 56.9235 26.1229 34.2648 43.0765 79.5440
AY+ 2 68.6906 11.7671 24.8058 31.3094 79.2280
AY+ 3 76.7697 8.0791 18.4152 23.2303 79.2722
AY+ 4 83.5336 6.7639 12.8743 16.4664 78.1853
AY+ 5 88.9725 5.4390 8.2622 11.0275 74.9237
AY+ 6 91.6218 2.6493 6.1769 8.3782 73.7264
AY+ 7 93.4305 1.8087 4.7967 6.5695 73.0153
AY+ 8 94.3638 0.9333 4.2149 5.6362 74.7829
AY+ 9 95.0595 0.6957 3.8330 4.9405 77.5833
AY+10 N/A 0.6957 3.4202 4.2448 80.5728
AY+11 N/A 0.6957 2.9739 3.5492 83.7922
AY+12 N/A 0.6957 2.4915 2.8535 87.3145
AY+13 N/A 0.6957 1.9700 2.1578 91.2971
AY+14 N/A 0.6957 1.4063 1.4622 96.1805
AY+15 N/A 1.4622 0.0000 0.0000 N/A
_____________________________________________________________________
Reinsurance C
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 23.0513 23.0513 67.5856 76.9487 87.8321
AY+ 1 47.1565 24.1051 47.9977 52.8435 90.8298
AY+ 2 73.1742 26.0177 24.8345 26.8258 92.5771
AY+ 3 N/A 13.4129 12.9006 13.4129 96.1805
AY+ 4 N/A 13.4129 0.0000 0.0000 N/A
_____________________________________________________________________
Miscellaneous Casualty (Composite)
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 73.9503 73.9503 24.3970 26.0497 93.6557
AY+ 1 93.7601 19.8099 5.7767 6.2399 92.5771
AY+ 2 N/A 3.1199 3.0008 3.1199 96.1805
AY+ 3 N/A 3.1199 0.0000 0.0000 N/A
_____________________________________________________________________
Composite (Long Lines)
Discounted
Cumulative Estimated Unpaid Unpaid
Losses Losses Paid Losses at Losses at Discount
Tax Year Paid Each Year Year End Year End Factor
(%) (%) (%) (%) (%)
_____________________________________________________________________
AY+ 0 30.8006 30.8006 56.8224 69.1994 82.1140
AY+ 1 56.9235 26.1229 34.2648 43.0765 79.5440
AY+ 2 68.6906 11.7671 24.8058 31.3094 79.2280
AY+ 3 76.7697 8.0791 18.4152 23.2303 79.2722
AY+ 4 83.5336 6.7639 12.8743 16.4664 78.1853
AY+ 5 88.9725 5.4390 8.2622 11.0275 74.9237
AY+ 6 91.6218 2.6493 6.1769 8.3782 73.7264
AY+ 7 93.4305 1.8087 4.7967 6.5695 73.0153
AY+ 8 94.3638 0.9333 4.2149 5.6362 74.7829
AY+ 9 95.0595 0.6957 3.8330 4.9405 77.5833
AY+10 N/A 0.6957 3.4202 4.2448 80.5728
AY+11 N/A 0.6957 2.9739 3.5492 83.7922
AY+12 N/A 0.6957 2.4915 2.8535 87.3145
AY+13 N/A 0.6957 1.9700 2.1578 91.2971
AY+14 N/A 0.6957 1.4063 1.4622 96.1805
AY+15 N/A 1.4622 0.0000 0.0000 N/A
_____________________________________________________________________
DRAFTING INFORMATION
The principal author of this revenue procedure is Katherine A. Hossofsky of the Office of the Assistant Chief Counsel (Financial Institutions and Products). For further information regarding this revenue procedure, contact Ms. Hossofsky on (202) 622-3477 (not a toll-free number).
DOCUMENT ATTRIBUTES
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
26 CFR 601.201: Rulings and determination letters
(Also Part I, Sections 846; 1.846-1.)
- Code Sections
- Subject Areas/Tax Topics
- Index Termsinsurance companies, losses, discounted unpaid
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 93-7451 (21 original pages)
- Tax Analysts Electronic Citation93 TNT 141-16
