US · guidance

Rev. Proc. 2025-15, 2025-11 I.R.B. 1090

activein force · 2025-03-10 – presentact-effective-date

SECTION 1. PURPOSE

This revenue procedure provides discount factors for the 2024 accident year for use by insurance companies in computing discounted unpaid losses under § 846 of the Internal Revenue Code1 and discounted estimated salvage recoverable under § 832. This revenue procedure also provides, for convenience, discount factors for losses incurred in the 2023 accident year and earlier accident years for use in taxable years beginning in 2024. The discount factors for accident years before 2024 were provided in earlier revenue procedures. See, e.g., Rev. Proc. 2023-41, 2023-52 I.R.B. 1609. See Rev. Proc. 2023-10, 2023-3 I.R.B. 411, for background concerning the loss payment patterns and application of the discount factors. This revenue procedure also requests comments relating to the composite method described in this revenue procedure and a 2024 change by the National Association of Insurance Commissioners (NAIC) to Schedule P (Analysis of Losses and Loss Expenses) of the annual statement.

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 of the Treasury or the Secretary’s delegate (Secretary) and also applies to any insurance company that is required to discount estimated salvage recoverable under § 832.

SECTION 3. DISCOUNT FACTORS FOR THE 2024 ACCIDENT YEAR

.01 The tables in this section 3 present separately for each line of business the discount factors for losses incurred in the 2024 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 2024 under § 846(c), which is 3.18 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 § 1.846-1(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 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.

Discount Factors for 2024 2024 Interest Rate (using semi-annual compounding): 3.18%

Table 1 (part A) Discount Factors Under Section 846 (percent) For Losses Incurred in Accident Year 2024 in Short-Tail Lines of Business

Taxable Year Beginning in

Auto Physical Damage

Fidelity/Surety

Financial Guaranty/Mortgage Guaranty

International

Other*

2024

98.2294

95.3527

94.8106

95.5017

96.7165

2025

96.9063

Taxpayer Not Using Composite Method

Years after 2025

98.4349

Taxpayer Using the Composite Method

2026

98.4349

Years after 2026

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

* For the Accident and Health line of business (other than disability income or credit disability insurance), the discount factor for taxable year 2024 is 98.4349 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 2024 is the discount factor published for Accident and Health lines of business for losses incurred in the accident year coinciding with the taxable year.

Table 1 (part B) Discount Factors Under Section 846 (percent) For Losses Incurred in Accident Year 2024 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

2024

95.4724

94.4556

95.8586

97.3675

98.2204

96.9644

2025

96.9063

Taxpayer Not Using Composite Method

Years after 2025

98.4349

Taxpayer Using the Composite Method

2026

98.4349

Years after 2026

Use composite method discount factors published for 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 2024 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

2024

93.5297

90.9642

85.7501

95.0266

90.6679

89.1463

2025

94.1807

92.1360

87.8094

93.3234

91.6872

90.0762

2026

94.7825

92.4837

89.3161

93.3592

91.7326

90.8391

2027

95.1149

93.4135

90.8021

93.2872

91.9561

91.2159

2028

95.0077

93.2265

91.6724

93.0521

91.8814

91.5431

2029

94.4985

93.9140

92.0908

93.3279

91.9254

90.4397

2030

94.5195

93.4466

92.5061

93.4114

91.5352

90.4147

2031

95.0319

94.3864

92.3540

95.3151

93.3566

91.2169

2032

96.0761

95.8189

94.3192

96.2136

96.0795

92.2913

2033

98.0909

97.4088

96.1397

97.7808

96.7172

94.2707

Taxpayer Not Using Composite Method

2034

98.4349

97.5433

98.4349

98.1879

95.7140

2035

98.4349

97.1521

Years after 2035

98.4349

Taxpayer Using the Composite Method

2034

98.4349

97.7753

98.4349

98.2165

96.6902

Years after 2034

Use composite method discount factors published for 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 2024 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

2024

95.4774

88.2374

87.5362

88.0319

92.8228

2025

95.1115

89.6632

89.0194

86.4322

92.0595

2026

95.2005

89.9220

90.2196

85.7969

91.7990

2027

95.1136

88.8949

90.8424

85.2788

91.1056

2028

94.1424

90.5036

91.1923

85.5894

90.7820

2029

93.4703

92.2243

91.6975

84.9266

90.2776

2030

94.0845

94.1006

92.6920

85.5556

90.5337

2031

94.2401

94.5726

93.0041

87.1549

91.9386

2032

95.0499

95.9293

94.1108

88.6763

93.3939

2033

97.3891

97.7393

96.2921

89.6659

94.7828

Taxpayer Not Using Composite Method

2034

98.4349

97.6992

91.0410

96.2231

2035

98.4349

92.4444

97.6275

2036

98.4349

93.8763

98.4349

2037

98.4349

95.3366

98.4349

2038

98.4349

96.8232

98.4349

2039

98.4349

98.3237

98.4349

Years after 2039

98.4349

Taxpayer Using the Composite Method

2034

98.4349

97.5990

97.8683

93.2948

97.2397

Years after 2034

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

SECTION 4. DISCOUNT FACTORS FOR TAXABLE YEARS BEGINNING IN 2024

.01 The tables in this section 4 present separately for each line of business discount factors for losses incurred in the 2024 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 2024.

.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 2024 Short-Tail Lines of Business

Accident Year

Auto Physical Damage

Fidelity/Surety

Financial Guaranty/Mortgage Guaranty

International

Other*

2024

98.2294

95.3527

94.8106

95.5017

96.7165

2023

97.1719

Taxpayer Not Using Composite Method

2022

98.6826

2021

98.5999

2020

98.4834

2019

98.4785

Years before 2019

98.5513

Taxpayer Using the Composite Method

Years before 2023

98.6826

* For the Accident and Health line of business (other than disability income or credit disability insurance), the discount factor for taxable year 2024 is 98.4349 percent.

Table 3 (part B) Discount Factors Under Section 846 (percent) For Taxable Year(s) Beginning in 2024 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

2024

95.4724

94.4556

95.8586

97.3675

98.2204

96.9644

2023

97.1719

Taxpayer Not Using Composite Method

2022

98.6826

2021

98.5999

2020

98.4834

2019

98.4785

Years before 2019

98.5513

Taxpayer Using the Composite Method

Years before 2023

98.6826

Table 4 (part A) Discount Factors Under Section 846 (percent) For Taxable Year(s) Beginning in 2024 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

2024

93.5297

90.9642

85.7501

95.0266

90.6679

89.1463

2023

94.6657

92.7807

88.7877

93.8732

92.3628

90.8746

2022

95.5799

93.6166

90.9006

94.3613

92.9667

92.1947

2021

95.4717

93.3572

92.0790

93.4173

92.4864

91.2022

2020

94.9861

92.9813

92.4445

91.0317

91.7488

90.2789

2019

94.8102

92.9821

93.1951

91.2099

92.2519

90.3215

2018

95.3260

94.2423

94.3189

91.3154

93.0770

90.7788

2017

94.9804

95.1291

94.9993

91.0177

93.8378

91.9830

2016

96.4102

96.0160

96.1220

93.5200

94.9264

92.6228

2015

98.3585

97.7503

97.7902

94.8530

96.6876

94.4974

Taxpayer Not Using the Composite Method

2014

98.5513

96.1895

98.0033

95.8511

2013

98.5513

97.5045

98.5513

97.2176

Years before 2013

98.5513

Taxpayer Using the Composite Method

Years before 2015

98.5513

96.9185

98.0920

96.7300

Table 4 (part B) Discount Factors Under Section 846 (percent) For Taxable Year(s) Beginning in 2024 Long-Tail Lines of Business

Accident Year

Private Passenger Auto Liability/Medical

Products Liability - Claims-Made

Products Liability - Occurrence

Workers’ Compensation

Long-Tail Composite

2024

95.4774

88.2374

87.5362

88.0319

92.8228

2023

95.5202

90.4947

89.9028

87.4781

92.7019

2022

95.9333

91.4161

91.6708

87.8161

93.0141

2021

95.0561

84.2953

91.4658

84.4348

90.5906

2020

93.9744

84.4598

89.4430

82.7387

88.2753

2019

94.0072

85.7981

89.4605

82.1401

88.1205

2018

94.5205

87.8040

90.8527

83.2567

88.6258

2017

95.0550

89.0388

91.8072

84.1036

89.1661

2016

95.6473

90.2969

92.1992

84.7150

90.3858

2015

97.7282

91.5785

94.4133

86.5946

92.1457

Taxpayer Not Using the Composite Method

2014

98.5513

92.8838

95.7739

87.8065

93.4541

2013

98.5513

94.2124

97.1571

89.0414

94.7812

2012

98.5513

95.5629

98.5513

90.2995

96.1195

2011

98.5513

96.9299

98.5513

91.5813

97.4421

2010

98.5513

98.2868

98.5513

92.8867

98.5513

2009

98.5513

94.2154

98.5513

2008

98.5513

95.5661

98.5513

2007

98.5513

96.9334

98.5513

2006

98.5513

98.2913

98.5513

Years before 2006

98.5513

Taxpayer Using the Composite Method

Years before 2015

98.5513

94.7288

96.6903

91.2579

95.0968

SECTION 5. PET INSURANCE LINE OF BUSINESS

The NAIC added Pet Insurance as a new separate line of business to be reported in Schedule P of the annual statement for 2024. Pet Insurance was previously reported as an Inland Marine line of business, which is reported in Schedule P as part of the Special Property line of business. Under § 1.846-1(b)(1)(iii), which deals with annual statement changes in the groupings of individual lines of business, unpaid losses for Pet Insurance are to be discounted using discount factors published for the Special Property line of business. See Table 1 (Part B) in section 3 of this revenue procedure and Table 3 (Part B) in section 4 of this revenue procedure.

SECTION 6. REQUEST FOR COMMENTS

.01 Comments Regarding Composite Method. 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. Beginning in 2024, the NAIC has changed Schedule P of the annual statement to require ten years of data (and a “prior” row) to be reported for all lines of business. The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) expect that composite method discount factors will be of limited use to insurance companies with respect to the lines of business set forth in Tables 1 and 3 following the NAIC change. The Treasury Department and the IRS request comments on:

(1) whether, and the extent to which, insurance companies expect to use composite method discount factors with respect to the lines of business set forth in Tables 1 and 3 following the NAIC change;

(2) whether insurance companies need the Secretary to continue publishing such composite method discount factors; and

(3) whether insurance companies require additional guidance regarding the use of composite method discount factors with respect to these lines of business.

.02 Procedures for Submitting Comments.

(1) Deadline. Written comments should be submitted by May 16, 2025.

(2) Form and manner. The subject line for the comments should include a reference to Revenue Procedure 2025-15. All commenters are strongly encouraged to submit comments electronically. However, comments may be submitted in one of two ways:

(a) Electronically via the Federal eRulemaking Portal at www.regulations.gov (type IRS-2025-0018 in the search field on the regulations.gov homepage to find this revenue procedure and submit comments); or

(b) By mail to: Internal Revenue Service, CC:PA:01:PR (Revenue Procedure 2025-15), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C., 20044.

(3) Publication of comments. The Treasury Department and the IRS will publish for public availability any comment submitted electronically or on paper to its public docket on regulations.gov.

SECTION 7. DRAFTING INFORMATION

The principal author of this revenue procedure is James Carpino of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue procedure, contact Mr. Carpino at (202) 317-6905 (not a toll-free call).

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).

History

Revenue Procedure published in Internal Revenue Bulletin 2025-11, March 10, 2025, at page 1090. It states no effective date of its own; this row opens at the bulletin's publication date.

Provenance

Source: irs.gov
Retrieved: 2026-09-20
Edition: irs-irb-2026-09-20
Content hash: 89c2a2daebaa02c0b3b3c3ebdc5ff28bef9db268dee7d54fb024c67123ed7b8f

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