Page:United States Statutes at Large Volume 73.djvu/163

 73 S T A T. ]

PUBLIC LAW 86-e9-JUNE 26, 1969

tribution with respect to which a reduction is required under section 8 1 5 (e)(2)(B). "SEC. 810. RULES FOR CERTAIN RESERVES. " (a) ADJUSTMENT FOR DECREASE.—If the sum of the items described in subsection (c) as of the beginning of the taxable year exceeds the sum of such items as of the close of the taxable year (reduced by the amount of investment yield not included in gain or loss from operations for the taxable year by reason of section 809(a)(1)), the excess shall be taken into account as a net decrease referred to in section 809(c)(2). " (b) ADJUSTMENT FOR INCREASE.—If the sum of the items described in subsection (c) as of the close of the taxable year (reduced by the amount of investment yield not included in gain or loss from operations for the taxable year by reason of section 809(a)(1)) exceeds the sum of such items as of the beginning of the taxable year, the excess shall be taken into account as a net increase referred to in section 809(d)(2). "(c) ITEMS T A K E N INTO ACCOUNT.—The items referred to in subsections (a) and (b) are as follows: " (1) The life insurance reserves (as defined in section 801(b)). "(2) The unearned premiums and unpaid losses included in total reserves under section 801(c)(2). "(3) The amounts (discounted at the rates of interest assumed by the company) necessary to satisfy the obligations under insurance or annuity contracts (including contracts supplementary thereto), but only if such obligations do not involve (at the time with respect to which the computation is made under this paragraph) life, health, or accident contingencies. " (4) Dividend accumulations, and other amounts, held at interest in connection with insurance or annuity contracts (including contracts supplementary thereto). " (5) Premiums received m advance, and liabilities for premium deposit funds. I n applying this subsection, the same item shall be counted only once. "(d)

ADJUSTMENT FOR CHANGE IN COMPUTING EESERVES.—

"(1) IN GENERAL.—If the basis for determining any item referred to in subsection (c) as of the close of any taxable year differs from the basis for such determination as of the close of the preceding taxable year, then so much of the difference between— " (A) the amount of the item at the close of the taxable year, computed on the new basis, and " (B) the amount of the item at the close of the taxable year, computed on the old basis, as is attributable to contracts issued before the taxable year shall be taken into account for purposes of this subpart as follows: " (i) if the amount determined under subparagraph (A) exceeds the amount determined under subparagraph (1^)5 Ao of such excess shall be taken into account, for each of the succeeding 10 taxable years, as a net increase to which section 809(d)(2) applies; or "(ii) if the amount determined under subparagraph (B) exceeds the amount determined under subparagraph (A), i/io of such excess shall be taken into account for each of the 10 succesding taxable years, as a net decrease to which section 809(c)(2) applies. "(2)

TERMINATION AS LIFE INSURANCE COMPANY.—Except as

provided in section 381(c) (22) (relating to carryovers in certain corporate readjustments), if for any taxable year the taxpayer is not a life insurance company, the balance of any adjustments

126

�