Back in July, just when we thought the IRS had finalized their loss reserve discounting templates, they issued final regulations under IRC Section 846 and two accompanying revenue procedures providing additional guidance and revised discount factors.
Revenue Procedure 2019-30 waives the requirement to file a Form 3115 when an insurer changes its method of accounting for discounting 1) unpaid losses and expenses, 2) estimated salvage recoverable and 3) unearned premiums attributable to title insurance, in order to comply with IRC Section 846, as amended by the Tax Cuts and Jobs Act. Revenue Procedure 2019-31 provides revised discount factors to be used for the 2019, 2018 and earlier accident years.
The most significant difference between the proposed and final regulations is that the annual rate determined under the proposed regulations was 3.12 percent, whereas the annual rate determined under the final regulations is 2.94 percent.
You can read more details in our original SSAP Chat article here.