Page:United States Statutes at Large Volume 100 Part 3.djvu/1038

 100 STAT. 2846

PUBLIC LAW 99-514—OCT. 22, 1986

CONTRACTS.—A company shall be treated as meeting the requirements of section 807(d)(3)(A)(iii) of the Internal Revenue Code of 1954, as amended by this Act, with respect to any directly-written noncancellable accident and health insurance contract (whether under existing or new plans of insurance) for any taxable year if— "(1) such company— "(A) was using the net level reserve method to compute at least 99 percent of its statutory reserves on such contracts as of December 31, 1982, and "(B) received more than half its total direct premiums in 1982 from directly-written noncancellable accident and health insurance, "(2) after December 31, 1983, and through such taxable year, such company has continuously used the net level reserve method for computing at least 99 percent of its tax and statutory reserves on such contracts, and "(3) for any such contract for which the company does not use the net level reserve method, such company uses the same ^^ method for computing tax reserves as such company uses for computing its statutory reserves." SEC. 1824. AMENDMENT RELATED TO SECTION 218 OF THE ACT.

Section 218 of the Tax Reform Act of 1984 is hereby repealed. SEC. 1825. AMENDMENTS RELATED TO SECTION 221 OF THE ACT. (a) COMPUTATIONAL RULES.—

(1) Paragraph (1) of section 7702(e) (relating to computational rules) is amended— (A) by striking out "shall be no earlier than" in subparagraph (B) and inserting in lieu thereof "shall be deemed to be no earlier than", (B) by striking out "and" at the end of subparagraph (B), (C) by redesignating subparagraph (C) as subparagraph (D) and inserting after subparagraph (B) the following new subparagraph: "(C) the death benefits shall be deemed to be provided until the maturity date determined by taking into account subparagraph (B), and", and (D) by striking out "the maturity date described in subparagraph (B)" in subparagraph (D) (as so redesignated) and inserting in lieu thereof "the maturity date determined by taking into account subparagraph (B)". (2) Subparagraph (C) of section 7702(b)(2) is amended by striking out "subparagraphs (A) and (C)" and inserting in lieu thereof "subparagraphs (A) and (D)". (3) Section 7702(e)(l) is amended by inserting "(other than subsection (d))" after "section". (4) Section 7702(e)(2) is amended— (A) by striking out "and" at the end of subparagraph (A), (B) by striking out the period at the end of subparagraph (B), and inserting in lieu thereof a comma and "and', and (C) by adding at the end thereof the following new subparagraph: "(C) for purposes of the cash value accumulation test, the death benefit increases may be taken into account if the contract—

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