IRS releases discount factors for insurers

 

The IRS recently released Rev. Proc. 2023-10, providing discounting tables/factors that are required to be used for property and casualty insurance company loss reserves for the 2022 accident year — as well as for anticipated salvage and subrogation. This annual guidance includes the detailed tables for insurance reserves by property and casualty line of business.

 

The discount factors are determined on a yearly basis pursuant to Section 846 and estimated salvage recoverable under Section 832 — provisions of the Code that were amended by the 2017 Tax Cuts and Jobs Act (Pub. L. No. 115-97) — as well as the final regulations under Section 846, published in June 2019.

 

The factors in this revenue procedure are determined using the applicable interest rate under Section 846(c) of 2.67%, compounded semiannually, and payment patterns determined under Section 846(d).

 

 

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