Page:United States Statutes at Large Volume 98 Part 1.djvu/774

 98 STAT. 726

PUBLIC LAW 98-369—JULY 18, 1984 the same year and shall be treated as first being offset against income which is not nonlife income. "(C) NONLIFE INCOME.—

"(i) IN GENERAL.—The term 'nonlife income' means the portion of the life insurance company's taxable income for which the special life insurance company deduction was not allowable and any income of a corporation not subject to tax under this part. "(ii) SPECIAL RULE FOR TAXABLE YEARS BEGINNING

BEFORE JANUARY 1, 1984.—In the case of a taxable year beginning before January 1, 1984, all life insurance company taxable income shall be treated as nonlife income. "(5) ADJUSTMENTS TO PREVENT EXCESS DETRIMENT OR BENE-

FIT.—Under regulations prescribed by the Secretary, proper adjustments shall be made in the application of this subsection to prevent any excess detriment or benefit (whether from yearto-year or otherwise) arising from the application of this subsection. 26 USC 807.

Post, p. 733. Ante, p. 721.

Ante, p. 722.

"SEC. 807. RULES FOR CERTAIN RESERVES. "(a) DECREASE TREATED AS GROSS INCOME.—If for any taxable year— "(1) the opening balance for the items described in subsection (c), exceeds "(2)(A) the closing balance for such items, reduced by "(B) the sum of (i) the amount of the policyholders' share of tax-exempt interest, plus (ii) any excess described in section 809(a)(2) for the taxable year. such excess shall be included in gross income under section 803(a)(2). "(b) INCREASE TREATED AS DEDUCTION.—If for any teixable year— "(1)(A) the closing balance for the items described in subsection (c), reduced by "(B) the sum of (i) the amount of the policyholders' share of tax-exempt interest, plus (ii) any excess described in section 809(a)(2) for the taxable year, exceeds "(2) the opening balance for such items, such excess shall be taken into account as a deduction under section 805(a)(2). "(c) ITEMS TAKEN INTO ACCOUNT.—The items referred to in subsec-

Post, p. 748.

tions (a) and (b) are as follows: "(1) The life insurance reserves (as defined in section 816(b)). "(2) The unearned premiums and unpaid losses included in total reserves under section 816(c)(2). "(3) The amounts (discounted at the appropriate rate of interest) necessary to satisfy the obligations under insurance and annuity contracts, but only if such obligations do not involve (at the time with respect to which the computation is made under this paragraph) life, accident, or health contingencies. "(4) Dividend accumulations, and other amounts, held at interest in connection with insurance and annuity contracts. "(5) Premiums received in advance, and liabilities for premium deposit funds. "(6) Reasonable special contingency reserves under contracts of group term life insurance or group accident and health insurance which are established and maintained for the provi-

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