IRS releases discount factors

Article Abstract:

Three procedures containing industry-average discount factors for computing loss reserves and estimated salvage and subrogation are available from the IRS for the 1992 tax year. The procedures are important for helping companies determine whether they should discount reserves using industry averages or company histories in accordance with the Tax Reform Act of 1986. Revenue Procedure 92-47 provides discount factors that can be used to calculate loss reserves. Procedures 92-52 and 92-53 provide factors for salvage receipt.

Subrogation

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Taxpayer wins intangible assets case

Article Abstract:

The Apr 20, 1993 ruling by the Supreme Court on the right to claim depreciation on intangible assets has important repercussions for the insurance industry. The five-to-four ruling maintains that intangible assets are amortizable if they have a determinable value for which a decrease can be shown. The method by which companies determine the value of intangibles is still open to dispute, and Congress is considering legislation that would clarify this.

Newspapers, Cases, Amortization, Newark Morning Ledger Co.

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IRS releases final discounting rules

Article Abstract:

Internal Revenue Code section 846, which regulates the discounting of unpaid losses by insurance companies, has been issued in its final form. The rule subsumes the following provisions: the use of company payment patterns to compute discounts, discount tables, the 90% rule for reinsurance, the fresh-start provision, the adjustment of annual statement reserves, title insurance and IRS Revenue Procedure 92-76 for determining a line's eligibility.

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