Sec. 13523. Modification of discounting rules for property and casualty insurance companies

438 words·~2 min read·/bill/115/hr/1/unknown/section-13523

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Paragraph

(2)of section 846(c) is amended to read as follows: The annual rate determined by the Secretary under this paragraph for any calendar year shall be a rate determined on the basis of the corporate bond yield curve (as defined in section 430(h)(2)(D)(i), determined by substituting 60-month period for 24-month period therein). . Section 846(d)(3) is amended by striking subparagraphs

(B)through

(G)and inserting the following new subparagraph: In the case of any line of business not described in subparagraph (A)(ii), losses paid after the 1st year following the accident year shall be treated as paid equally in the 2nd and 3rd year following the accident year. The period taken into account under subparagraph (A)(ii) shall be extended to the extent required under subclause (II). The amount of losses which would have been treated as paid in the 10th year after the accident year shall be treated as paid in such 10th year and each subsequent year in an amount equal to the amount of the average of the losses treated as paid in the 7th, 8th, and 9th years after the accident year (or, if lesser, the portion of the unpaid losses not theretofore taken into account). To the extent such unpaid losses have not been treated as paid before the 24th year after the accident year, they shall be treated as paid in such 24th year. . Section 846 , as amended by this Act, is amended by striking subsection

(e)and by redesignating subsections

(f)and

(g)as subsections

(e)and (f), respectively. The amendments made by this section shall apply to taxable years beginning after December 31, 2017. For the first taxable year beginning after December 31, 2017— the unpaid losses and the expenses unpaid (as defined in paragraphs (5)(B) and

(6)of section 832(b) of the Internal Revenue Code of 1986) at the end of the preceding taxable year, and the unpaid losses as defined in sections 807(c)(2) and 805(a)(1) of such Code at the end of the preceding taxable year, shall be determined as if the amendments made by this section had applied to such unpaid losses and expenses unpaid in the preceding taxable year and by using the interest rate and loss payment patterns applicable to accident years ending with calendar year 2018, and any adjustment shall be taken into account ratably in such first taxable year and the 7 succeeding taxable years. For subsequent taxable years, such amendments shall be applied with respect to such unpaid losses and expenses unpaid by using the interest rate and loss payment patterns applicable to accident years ending with calendar year 2018.