rp-23-41.pdf

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26 CFR 601.201: Rulings and determination letters.
(Also: Part I, Sections 832, 846; 1.832-4, 1.846-1.)
Rev. Proc. 2023-41
SECTION 1. PURPOSE
This revenue procedure prescribes discount factors for the 2023 accident year for
use by insurance companies in computing discounted unpaid losses under § 846 of the
Internal Revenue Code and discounted estimated salvage recoverable under § 832.
This revenue procedure also provides, for convenience, discount factors for losses
incurred in the 2022 accident year and earlier accident years for use in taxable years
beginning in 2023. The discount factors for accident years before 2023 were prescribed
in earlier revenue procedures. See, e.g., Rev. Proc. 2023-10, 2023-3 I.R.B. 411. For
background concerning the loss payment patterns and application of the discount
factors, see Rev. Proc. 2023-10.
SECTION 2. SCOPE
This revenue procedure applies to any insurance company that is required to
discount unpaid losses under § 846 for a line of business using the discount factors
published by the Secretary. This revenue procedure also applies to any insurance
company that is required to discount estimated salvage recoverable under § 832.

SECTION 3. DISCOUNT FACTORS FOR THE 2023 ACCIDENT YEAR
.01 The tables in this section 3 separately present for each line of business the
discount factors for losses incurred in the 2023 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 2023 under § 846(c), which is 2.90
percent, determined using semiannual compounding. 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. These discount factors are to be used in
taxable years beginning in 2033 for losses incurred in accident years not separately
reported on the annual statement for 2033. For taxable years beginning after 2033, the
discount factors to be used for losses incurred in the 2023 accident year will be those
determined using the composite method for later accident years. These discount factors
will be published in later years. All discount factors are determined by assuming that 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 § 1.846-1(b)(1)(ii)
and (4) of the Income Tax Regulations, 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 “Long-Tail 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.
Table 1 (part A)
Discount Factors Under Section 846 (percent)
For Losses Incurred in Accident Year 2023 in Short-Tail Lines of Business
Taxable Year
Beginning in
Auto Physical
Damage Fidelity/Surety
Financial
Guaranty/
Mortgage
Guaranty International Other*
2023 98.3826 95.7477 95.2511 95.8842 96.9968
2024 97.1719 97.1719 97.1719 97.1719 97.1719
Taxpayer Not Using Composite Method
Years after 2024 98.5707 98.5707 98.5707 98.5707 98.5707
Taxpayer Using the Composite Method
2025 98.5707 98.5707 98.5707 98.5707 98.5707
Years after 2025 Use composite method discount factors published for the relevant accident year.**
*For the Accident and Health line of business (other than disability income or credit disability insurance), the
discount factor for taxable year 2023 is 98.5707 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 2023 is the discount factor published for Accident and Health lines of business for
losses incurred in the accident year coinciding with the taxable year.
**The relevant accident year is the accident year that is two years prior to the specified taxable year.

Table 1 (part B)
Discount Factors Under Section 846 (percent)
For Losses Incurred in Accident Year 2023 in Short-Tail Lines of Business
Taxable Year
Beginning in
Reinsurance -
Nonproportional
Assumed
Financial Lines
Reinsurance -
Nonproportional
Assumed
Liability
Reinsurance -
Nonproportional
Assumed
Property
Special Property
(Fire,
Allied Lines,
Inland Marine,
Earthquake,
Burglary & Theft) Warranty
Short-Tail
Composite
2023 95.8574 94.9260 96.2110 97.5931 98.3742 97.2238
2024 97.1719 97.1719 97.1719 97.1719 97.1719 97.1719
Taxpayer Not Using Composite Method
Years after 2024 98.5707 98.5707 98.5707 98.5707 98.5707 98.5707
Taxpayer Using the Composite Method
2025 98.5707 98.5707 98.5707 98.5707 98.5707 98.5707
Years after 2025 Use composite method discount factors published for the relevant accident year.**
**The relevant accident year is the accident year that is two years prior to the specified taxable year.
Table 2 (part A)
Discount Factors Under Section 846 (percent)
For Losses Incurred in Accident Year 2023 in Long-Tail Lines of Business
Taxable Year
Beginning in
Commercial
Auto/Truck
Liability/Medical
Medical
Professional
Liability -
Claims-Made
Medical
Professional
Liability -
Occurrence
Multiple Peril
Lines
Other
Liability -
Claims-
Made
Other
Liability -
Occurrence
2023 94.0669 91.7012 86.8831 95.4382 91.4237 90.0155
2024 94.6657 92.7807 88.7877 93.8732 92.3628 90.8746
2025 95.2185 93.1025 90.1803 93.9066 92.4061 91.5784
2026 95.5234 93.9577 91.5512 93.8414 92.6133 91.9264
2027 95.4250 93.7878 92.3543 93.6275 92.5473 92.2284
2028 94.9588 94.4205 92.7420 93.8836 92.5915 91.2169
2029 94.9803 93.9949 93.1270 93.9644 92.2397 91.1996
2030 95.4526 94.8602 92.9930 95.7120 93.9160 91.9425
2031 96.4116 96.1752 94.7992 96.5370 96.4131 92.9346
2032 98.2559 97.6318 96.4691 97.9721 96.9986 94.7538
Taxpayer Not Using Composite Method
2033 98.5707 98.5707 97.7548 98.5707 98.3447 96.0789
2034 98.5707 98.5707 98.5707 98.5707 98.5707 97.3969
Years after 2034 98.5707 98.5707 98.5707 98.5707 98.5707 98.5707
Taxpayer Using the Composite Method
2033 98.5707 98.5707 97.9643 98.5876 98.3699 97.0305
Years after 2033 Use composite method discount factors published for the relevant accident year.**
**The relevant accident year is the accident year that is ten years prior to the specified taxable year.

Table 2 (part B)
Discount Factors Under Section 846 (percent)
For Losses Incurred in Accident Year 2023 in Long-Tail Lines of Business
Taxable
Year Beginning in
Private
Passenger
Auto Liability/
Medical
Products
Liability -
Claims-Made
Products
Liability -
Occurrence
Workers'
Compensation
Long-Tail
Composite
2023 95.8562 89.1780 88.5317 88.9551 93.4051
2024 95.5202 90.4947 89.9028 87.4781 92.7019
2025 95.6012 90.7369 91.0112 86.8945 92.4617
2026 95.5203 89.7998 91.5875 86.4217 91.8247
2027 94.6286 91.2853 91.9130 86.7149 91.5295
2028 94.0135 92.8707 92.3814 86.1127 91.0702
2029 94.5794 94.5952 93.2984 86.7030 91.3120
2030 94.7253 95.0313 93.5893 88.1853 92.6078
2031 95.4710 96.2767 94.6085 89.5932 93.9475
2032 97.6138 97.9342 96.6089 90.5104 95.2242
Taxpayer Not Using Composite Method
2033 98.5707 98.5707 97.8975 91.7803 96.5456
2034 98.5707 98.5707 98.5707 93.0739 97.8319
2035 98.5707 98.5707 98.5707 94.3915 98.5707
2036 98.5707 98.5707 98.5707 95.7327 98.5707
2037 98.5707 98.5707 98.5707 97.0957 98.5707
2038 98.5707 98.5707 98.5707 98.4690 98.5707
Years after 2038 98.5707 98.5707 98.5707 98.5707 98.5707
Taxpayer Using the Composite Method
2033 98.5707 96.6888 98.2220 92.8090 96.9820
Years after 2033
Use composite method discount factors published for the relevant accident year.**
**The relevant accident year is the accident year that is ten years prior to the specified taxable year.

SECTION 4. DISCOUNT FACTORS FOR TAXABLE YEARS BEGINNING IN 2023
.01 The tables in this section 4 present separately for each line of business
discount factors for losses incurred in the 2023 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 2023.
.02 Tables 3 and 4 separately provide discount factors for insurance companies
that have elected to use the composite method of Notice 88-100. See Rev. Proc. 2002-
74. 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 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 2023
Short-Tail Lines of Business
Auto Physical
Damage Fidelity/Surety
Financial
Guaranty/
Mortgage
Guaranty International Other*
2023 98.3826 95.7477 95.2511 95.8842 96.9968
2022 97.3911 97.3911 97.3911 97.3911 97.3911
Taxpayer Not Using Composite Method
2021 98.5999 98.5999 98.5999 98.5999 98.5999
2020 98.4834 98.4834 98.4834 98.4834 98.4834
2019 98.4785 98.4785 98.4785 98.4785 98.4785
Years before 2019 98.5513 98.5513 98.5513 98.5513 98.5513
Taxpayer Using the Composite Method
Years before 2022 98.5999 98.5999 98.5999 98.5999 98.5999
*For the Accident and Health line of business (other than disability income or credit disability insurance), the
discount factor for taxable year 2023 is 98.5707 percent.
Table 3 (part B)
Discount Factors Under Section 846 (percent)
For Taxable Year(s) Beginning in 2023
Short-Tail Lines of Business
Accident Year
Reinsurance -
Nonproportional
Assumed
Financial Lines
Reinsurance -
Nonproportional
Assumed
Liability
Reinsurance -
Nonproportional
Assumed
Property
Special Property
(Fire,
Allied Lines,
Inland Marine,
Earthquake,
Burglary & Theft) Warranty
Short-Tail
Composite
2023 95.8574 94.9260 96.2110 97.5931 98.3742 97.2238
2022 97.3911 97.3911 97.3911 97.3911 97.3911 97.3911
Taxpayer Not Using Composite Method
2021 98.5999 98.5999 98.5999 98.5999 98.5999 98.5999
2020 98.4834 98.4834 98.4834 98.4834 98.4834 98.4834
2019 98.4785 98.4785 98.4785 98.4785 98.4785 98.4785
Years before 2019 98.5513 98.5513 98.5513 98.5513 98.5513 98.5513
Taxpayer Using the Composite Method
Years before 2022 98.5999 98.5999 98.5999 98.5999 98.5999 98.5999
Accident Year

Table 4 (part A)
Discount Factors Under Section 846 (percent)
For Taxable Year(s) Beginning in 2023
Long-Tail Lines of Business
Accident Year
Commercial
Auto/Truck
Liability/Medical
Medical
Professional
Liability -
Claims-Made
Medical
Professional
Liability -
Occurrence
Multiple Peril
Lines
Other
Liability -
Claims-
Made
Other
Liability -
Occurrence
2023 94.0669 91.7012 86.8831 95.4382 91.4237 90.0155
2022 95.0679 93.3168 89.6041 94.3300 92.9253 91.5404
2021 95.4344 93.0842 90.7809 94.1554 92.4448 91.0405
2020 95.1096 92.8346 91.4580 92.9075 91.9007 90.5269
2019 94.9707 92.9600 92.4216 91.0050 91.7240 90.2502
2018 95.0498 93.3035 93.5069 91.6039 92.6040 90.7542
2017 95.3260 94.2423 94.3189 91.3154 93.0770 90.7788
2016 94.9804 95.1291 94.9993 91.0177 93.8378 91.9830
2015 96.4102 96.0160 96.1220 93.5200 94.9264 92.6228
2014 98.3585 97.7503 97.7902 94.8530 96.6876 94.4974
Taxpayer Not Using the Composite Method
2013 98.5513 98.5513 98.5513 96.1895 98.0033 95.8511
2012 98.5513 98.5513 98.5513 97.5045 98.5513 97.2176
Years before 2012 98.5513 98.5513 98.5513 98.5513 98.5513 98.5513
Taxpayer Using the Composite Method
Years before 2014 98.5513 98.5513 98.5513 96.9185 98.0920 96.7300

Table 4 (part B)
Discount Factors Under Section 846 (percent)
For Taxable Year(s) Beginning in 2023
Long-Tail Lines of Business
Accident Year
Private
Passenger
Auto Liability/
Medical
Products
Liability -
Claims-Made
Products
Liability -
Occurrence
Workers'
Compensation
Long-Tail
Composite
2023 95.8562 89.1780 88.5317 88.9551 93.4051
2022 95.8589 91.1883 90.6396 88.3566 93.2372
2021 95.4048 88.4963 90.1990 85.8758 91.7095
2020 94.6635 83.1315 90.8125 83.3180 89.8805
2019 93.9560 84.4151 89.4118 82.6909 88.2413
2018 94.2824 86.4184 89.9309 82.8905 88.6421
2017 94.5205 87.8040 90.8527 83.2567 88.6258
2016 95.0550 89.0388 91.8072 84.1036 89.1661
2015 95.6473 90.2969 92.1992 84.7150 90.3858
2014 97.7282 91.5785 94.4133 86.5946 92.1457
Taxpayer Not Using the Composite Method
2013 98.5513 92.8838 95.7739 87.8065 93.4541
2012 98.5513 94.2124 97.1571 89.0414 94.7812
2011 98.5513 95.5629 98.5513 90.2995 96.1195
2010 98.5513 96.9299 98.5513 91.5813 97.4421
2009 98.5513 98.2868 98.5513 92.8867 98.5513
2008 98.5513 98.5513 98.5513 94.2154 98.5513
2007 98.5513 98.5513 98.5513 95.5661 98.5513
2006 98.5513 98.5513 98.5513 96.9334 98.5513
2005 98.5513 98.5513 98.5513 98.2913 98.5513
Years before 2005 98.5513 98.5513 98.5513 98.5513 98.5513
Taxpayer Using the Composite Method
Years before 2014 98.5513 94.7288 96.6903 91.2579 95.0968
SECTION 5. DRAFTING INFORMATION
The principal author of this revenue procedure is James G. Carpino of the Office of
Associate Chief Counsel (Financial Institutions & Products). For further information
regarding this revenue procedure contact Mr. Carpino at (202) 317-6995 (not a toll-free
call).