Page:United States Statutes at Large Volume 73.djvu/150

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PUBLIC LAW 86-69-JUNE 25, 1959

[73 S T A T.

Public Law 86-69 June 25, 1959 [H. R. 4245]

^^ ^ ^ ' ^ Relating to the taxation of the income of life insurance companies.

Be it enacted by the Seriate and Rouse of Representatives United States of America in Congress assembled,

of the

SECTION 1. SHORT TITLE.

C(Lyany^?n'?o^I This Act may be cited as the "Life Insurance Company Income '^^^^^%\°^ \tl^\r. Tax Act of 1959". 68A Stat. 255; 70 ^*26 u l t 801-820. SEC. 2. REVISION OF PART I OF SUBCHAPTER L.

(a) Part I of subchapter L of chapter 1 of the Internal Revenue Code of 1954 (relating to life insurance companies) is amended to read as follows: "PART I—LIFE INSURANCE COMPANIES "Subpart "Subpart "Subpart "Subpart "Subpart

A. B. C. D. E.

Definition; tax imposed. Investment income. Gain and loss from operations. Distributions to shareholders. Miscellaneous provisions.

"Subpart A—Definition; Tax Imposed "Sec. 801. Definition of life insurance company. "SeCi 802. Tax imposed. "SEC. 801. DEFINITION OF LIFE INSURANCE COMPANY. " (a) L I F E INSURANCE COMPANY DEFINED.—For purposes of this

subtitle, the term 'life insurance company' means an insurance company which is engaged in the business of issuing life insurance and annuity contracts (either separately or combined with health and accident insurance), or noncancellaJble contracts of health and accident insurance, if— "(1) its life insurance reserves (as defined in subsection (b)), plus "(2) unearned premiums, and unpaid losses (whether or not ascertained), on noncancellable life, health, or accident policies not included in life insurance reserves, comprise more than 50 percent of its total reserves (as defined in subsection (c)). "(b)

L I T E INSURANCE RESERVES DEFINED.—

"(1) IN GENERAL.—For purposes of this part, the term 'life insurance reserves' means amounts— " (A) which are computed or estimated on the basis of recognized mortality or morbidity tables and assumed rates of interest, and " (B) which are set aside to mature or liquidate, either by payment or reinsurance, future unaccrued claims arising from life insurance, annuity, and noncancellable health and accident insurance contracts (including life insurance or annuity contracts combined with noncancellable health and accident insurance) involving, at the time with respect to which the reserve is computed, life, health, or accident contingencies. "(2)

RESERVES MUST BE REQUIRED BY LAW.—Except—

" (A) in the case of policies covering life, health, and accident insurance combined in one policy issued on the weekly premium payment plan, continuing for life and not subject to cancellation,

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