Page:United States Statutes at Large Volume 112 Part 4.djvu/925

 PUBLIC LAW 105-277—OCT. 21, 1998 112 STAT. 2681-896 "(B) such controlled foreign corporation is a qualifying insurance company, determined under paragraph (3) as if such unit were a qualifying insurance company branch. "(5) LIFE INSURANCE OR ANNUITY CONTRACT. — For purposes of this section and section 954, the determination of whether a contract issued by a controlled foreign corporation or a qualified business unit (within the meaning of section 989(a)) is a life insurance contract or an annuity contract shall be made without regard to sections 72(s), 101(f), 817(h), and 7702 if— "(A) such contract is regulated as a life insurance or annuity contract by the corporation's or unit's home country, and "(B) no policyholder, insured, annuitant, or beneficiary with respect to the contract is a United States person. "(6) HOME COUNTRY. —For purposes of this subsection, except as provided in regulations— "(A) CONTROLLED FOREIGN CORPORATION. —The term 'home country^ means, with respect to a controlled foreign corporation, the country in which such corporation is created or organized. "(B) QUALIFIED BUSINESS UNIT.—The term 'home country means, with respect to a qualified business unit (as defined in section 989(a)), the country in which the principal office of such unit is located and in which such unit is licensed, authorized, or regulated by the applicable insurance regulatory body to sell insurance, reinsurance, or annuity contracts to persons other than related persons (as defined in section 954(d)(3)) in such country. "(7) ANTI-ABUSE RULES, —For purposes of applying this subsection and section 954(i)— "(A) the rules of section 954(h)(7) (other than subparagraph (B) thereof) shall apply, "(B) there shall be disregarded any item of income, gain, loss, or deduction of, or derived from, an entity which is not engaged in regular and continuous transactions with persons which are not related persons, "(C) there shall be disregarded any change in the method of computing reserves a principal purpose of which is the acceleration or deferral of any item in order to claim the benefits of this subsection or section 954(i), "(D) a contract of insurance or I'einsurance shall not be treated as an exempt contract (and premiums from such contract shall not be taken into account for purposes of paragraph (2)(B) or (3)) if— "(i) any policyholder, insured, annuitant, or beneficiary is a resident of the United States and such contract was marketed to such rcjsident and was written to cover a risk outside the United States, or "(ii) the contract covers risks located within and without the United States and the qualifying insurance company or qualifying insurance company branch does not maintain such contemporaneous records, and file such reports, with respect to such contract as the Secretary may require, "(E) the Secretary may prescribe rules for the allocation Regulations. of contracts (and income from contracts) among 2 or more qualifying insurance company branches of a qualifying

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