Page:United States Statutes at Large Volume 56 Part 1.djvu/930

 [56 STAT. 4 Stat. 976. (b) Section 711 (a) (1) (relating to excess profits credit com- 26U.S. C.§711(a) (1); Supp. I, §711 (a) puted under income credit) is amended by inserting at the end thereof (t p. 903. the following new paragraph: Deductions from "(H) Life Insurance Companies. -In the case of a life oma tax net insurance company, there shall be deducted from the normal tax net income, the excess of (1) the product of (i) the Ante,p. 87. figure determined and proclaimed under section 202 (b) and (ii) the excess profits net income computed without regard to this subparagraph, over (2) the adjustment for Ante, p. 870. certain reserves provided in section 202 (c)." 54 Stat. 976. 261US. C. 711(a) (c) Section 711 (a) (2) (relating to the excess profits credit com- (2); Supp. I, 711(a) puted under invested capital credit) is amended by inserting at the (2)ot p.9. end thereof the following new subparagraph: "(J) In the case of a life insurance company, there shall be deducted from the normal tax net income, 50 per centum of the excess of (1) the product of (i) the figure determined Antep. 0. and proclaimed under section 202 (b) and (ii) the excess profits net income computed without regard to this subpara- graph, over (2) the adjustment for certain reserves provided Ant, p. 87. in section 202 (c)." 26s 98 . 718 (d) Section 718 (relating to equity invested capital) is amended supp. I,§ 7. by inserting at the end thereof the following new subsection: "(f) The reserves of an insurance company shall not be included in computing equity invested capital under this section but shall 4 Stat. C. be treated as borrowed capital as provided in section 719." 26d.S 79. (e) Section 719 (a) (relating to borrowed capital) is amended by striking out the period at the end thereof and inserting a comma and the word "plus" and a comma and the following new paragraphs: "(3) In the case of an insurance company, the mean of the amount of the pro rata unearned premiums determined at the beginning and end of the taxable year, plus, "(4) In the case of a life insurance company, the mean of the amount of the adjusted reserves, and the mean of the amount of the reserves on insurance or annuity contracts (or contracts aris- ing out of insurance or annuity contracts) which do not involve, at the time with reference to which the computation was made, life, health, or accident contingencies, determined at the beginning and end of the taxable year." Us.TC. 723. (f) Section 723 (relating to equity invested capital in special cases) is amended by designating the present section as subsection "(a)" and by adding a new subsection to read as follows: " (b) The equity invested capital of mutual insurance companies other than life, or marine, shall be the mean of the surplus, plus 50 per centum of the mean of all reserves required by law, both surplus and reserves being determined at the beginning and end of the taxable year. The surplus shall include all of the assets of the company other than reserves required by law." (g) SPECIFIC EXEXMPIO AND RETrUNS OF INTERINSUTRERS AND RECIPROCAL UNSDERWrTEtS.- 26 Sta. C. 710 (1) SPECIFI EXErPoN.- Section 710 (b) (1) is amended by )(. inserting before the semicolon at the end thereof a comma and the following: "and in the case of a mutual insurance company (other than life or marine) which is an interinsurer or reciprocal underwriter a specific exemption of $50,000". 31Stat.989:558tat. (2) REr'rNs. -Section 729 (b) (2) is amended by inserting 26 U.S. C.. Supp. I before the period at the end thereof the following: "or, in the case of a mutual insurance company (other than life or marine) which is an interinsurer or reciprocal underwriter, is not greater than $50,000". PUBLIC LAWS-CH. 619-OCT. 21, 1942 902

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