Page:United States Statutes at Large Volume 56 Part 1.djvu/898

 PUBLIC LAWS-CH. 619-OCT. 21, 1942 63 Stat. 18 . 26U. .C.§26. Ante, pp. 806, 807, 825,828 -830. 53 Stat. 7. 26U.S.C. §13(a). Ante, p. 805. "(g) CREDITS UNDER SECTION 26. -For the purposes of this section, in computing normal tax net income and corporation surtax net income, the credits provided in section 26 shall be allowed in the manner and to the extent provided in sections 13 (a) and 15 (a)." "SEC. 202. ADJUSTED NORMAL-TAX NET INCOME. Ante, p. 867. (a) DEFINITION.-For the purposes of section 201, the term 'adjusted normal-tax net income' means the normal-tax net income minus the reserve and other policy liability credit provided in sub- section (b) and plus the amount of the adjustment for certain reserves provided in subsection (c). "(b) RESERVE AND OTHER POLICY LIABILITY CREDIT. - AS used in this section the term 'reserve and other policy liability credit' means an amount computed by multiplying the normal-tax net income by a figure, to be determined and proclaimed by the Secretary for each Basis, taxable year. This figure shall be based on such data with respect to life insurance companies for the preceding taxable year as the Secretary considers representative and shall be computed in accord- Computation. ance with the following formula: The ratio which (1) the aggregate of the sums of (A) 2 per centum of the reserves for deferred dividends, (B) interest paid, and (C) the product of (i) the mean of the adjusted reserves at the beginning and end of the taxable year and (ii) the reserve earnings rate bears to (2) the aggregate of the excess of net incomes computed without any deduction for tax-free interest, over the adjustment for certain reserves provided in subsection (c). "(c) ADJUSTMENT FOR CERTAIN RESERVES.- In the case of a life insurance company writing contracts other than life insurance or annuity contracts (either separately or combined with noncancellable health and accident insurance), the term 'adjustment for certain reserves' means an amount equal to 31/4 per centum of the unearned premiums and unpaid losses on such other contracts which are not included in life insurance reserves. For the purposes of this subsec- tion such unearned premiums shall not be considered to be less than 25 per centum of the net premiums written during the taxable year on such other contracts. "SEC. 203. ADJUSTED CORPORATION SURTAX NET INCOME. "(a) DEFINITION.- For the purposes of section 201, the term adjusted corporation surtax net income' means the corporation surtax net income minus the reserve and other policy liability credit and plus the adjustment for certain reserves provided in section 202 (c). "(b) RESERVE AND OTHER POLICY LIABILITY CREDIT. - AS used in this section, the term 'reserve and other policy liability credit' means an amount computed by multiplying the corporation surtax net income by the figure determined and proclaimed under section 202 (b)." (b) TECHNICAL AMENDMENTS. - (1) Section 103 (relating to rates of tax on citizens and cor- porations of certain foreign countries) is amended by strikin out "201 (b)" wherever appearing therein and inserting "201 (a) (2) Section 208 (relating to net operating losses) is repealed. SEC. 164. INSURANCE COMPANIES OTHER THAN LIFE OR MUTUAL AND MUTUAL MARINE INSURANCE COMPANIES. (a) Section 204 (a) (relating to tax on insurance companies other than life or mutual) is amended to read as follows: "(a) IMPOSITION OF TAX.- "(1) IN GENERA. -There shall be levied, collected, and paid for each taxable year upon the normal-tax net income and upon the corporation surtax net income of every insurance company (other than a life or mutual insurance company) and every 870 [56 STAT. Ante, p. 867. upra. 53 Stat. 36 . 26U.S.C.§103. Post, p. 892. 53 Stat. 868. 26U. .C.§208. 53 Stat. 72. 26U. .C. §204(a).

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