The IRS recently released Rev. Proc. 2021-54
, providing discounting tables/factors that are required to be used for property and casualty insurance company loss reserves—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 2.84% compounded semiannually and payment patterns determined under Section 846(d).
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