IRS Provides Revenue Procedure on Discount Factors for Insurance Companies’ Unpaid Losses, Estimated Salvage Recoverable for 2025

The IRS has issued revenue procedures providing discount factors for insurance companies to use when computing discounted unpaid losses under I.R.C. §846 and discounted estimated salvage recoverable under I.R.C. §832 for the 2025 accident year and taxable years beginning in 2025. The discount factors are calculated using a 3.57 percent interest rate compounded semiannually. The guidance addresses changes made by the National Association of Insurance Commissioners in 2024 to Schedule P reporting requirements and requests comments on planned modifications to the composite method for determining discount factors, with changes expected to take effect for taxable years beginning in 2026. [Rev ...