A Look At New IRS Guidance For Discounting Unpaid Losses

By Kristan Rizzolo and Graham Green ( December 12, 2018, 8:26 PM EST) -- On Nov. 6, 2018, the Internal Revenue Service and the U.S. Department of Treasury issued proposed regulations that address amendments to the rules for discounting unpaid losses under Internal Revenue Code Section 846 that were enacted as part of the Tax Cuts and Jobs Act.[1] The proposed regulations principally address how to compute the annual rate for discounting purposes based on the corporate bond yield curve. The proposed regulations also provide guidance on other TCJA amendments to Section 846. The proposed regulations are relevant for both property and casualty and life insurance companies....

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