Page:United States Statutes at Large Volume 101 Part 2.djvu/1217

 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-423

"(4) DATA USED IN DETERMINING DOMESTIC ASSET/LIABILITY PERCENTAGES AND DOMESTIC INVESTMENT YEILDS.—Each domCStic

asset/liability percentage, and each domestic investment yield, for any taxable year shall be based on such representative data with respect to domestic insurance companies for the second preceding taxable year as the Secretary considers appropriate. "(d) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations— "(1) providing for the proper treatment of segregated asset accounts, "(2) providing for proper adjustments in succeeding taxable years where the company's actual net investment income for any taxable year which is effectively connected with the conduct of an insurance business within the United States exceeds the amount required under subsection (b)(D, and "(3) providing for the proper treatment of investments in domestic subsidiaries."



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(b) PART II COMPANIES SUBJECT TO SAME EFFECTIVELY CONNECTED

INCOME RULE AS PART I COMPANIES.—Subparagraph (C) of section

864(c)(4) (relating to income from sources without the United States) is amended by inserting "or part 11" after "part I". (c) REPEAL OF SECTION * *^ 813.—

(1) Section 813 (relating to foreign life insurance companies) is hereby repealed. f (2) Subsection (h) of section 816 is amended by striking out ¥ "section 813(a)(4)(B)" and inserting in lieu thereof "section 842(c)(l)(A)". (3) Paragraph (2) of section 4371 is amended by striking out "section 813" and inserting in lieu thereof "section 842(b)". (4) The table of sections for part I of subchapter L of chapter 1 is amended by striking out the item relating to section 813. (d) EFFECTIVE DATE,—The amendments made by this section shall 26 USC 816 note. apply to taxable years beginning after December 31, 1987. SEC. 10243. TREATMENT OF MUTUAL LIFE INSURANCE COMPANY POLICYHOLDER DIVIDENDS FOR PURPOSES OF BOOK PREFERENCE.

(a) GENERAL RULE.—Paragraph (2) of section 56(f) (defining adjusted net book income) is amended by redesignating subparagraph (H) as subparagraph (I) and by inserting after subparagraph (G) the following new subparagraph: "(H) SPECIAL RULES FOR U F E INSURANCE COMPANIES.— "(i) POLICYHOLDER DIVIDENDS OF MUTUAL COMPA-

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NIES.—In determining the adjusted net book income of any mutual life insurance company, a reduction shall be allowed for policyholder dividends with respect to any taxable year only to the extent such dividends exceed the differential earnings amount determined for such taxable year under section 809. "(ii) OTHER ADJUSTMENTS.—To the extent provided by



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the Secretary, such additional adjustments shall be made as may be necessary to make the calculation of adjusted net book income in the case of any life insur-

'"• Copy read "SECTION 813—".

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