Page:United States Statutes at Large Volume 98 Part 1.djvu/783

 PUBLIC LAW 98-369—JULY 18, 1984

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98 STAT. 735

"(3) BASE PERIOD STOCK EARNINGS RATE.—For purposes of this subsection, the base period stock earnings rate is the average of the stock earnings rates determined under paragraph (4) for calendar years 1981, 1982, and 1983. "(4) STOCK EARNINGS RATE.—

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"(A) IN GENERAL.—For purposes of this subsection, the stock earnings rate for any calendar year is the numerical average of the earnings rates of the 50 largest stock companies. "(B) EARNINGS RATE.—For purposes of subparagraph (A), ^•. the earnings rate of any stock company is the percentage (determined by the Secretary) which— "(i) the statement gain or loss from operations for the ^ calendar year of such company, is of "(ii) such company's average equity base for such pr. year. "(C) 50 LARGEST STOCK COMPANIES.—For purposes of this •iiu). paragraph, the term '50 largest stock companies' means a group (as determined by the Secretary) of stock life insurer ance companies which consists of the 50 largest stock life insurance companies which are subject to tax under this "O0e t part. The Secretary may by regulations provide for exclusion from the group determined under the preceding senffrie^ tence of any stock life insurance company if (i) the equity of 4 such company is not great enough for such company to be 1

of the 50 largest stock life insurance companies if the determination were made on the basis of equity, and (ii) by gj. f reason of the small equity base of such company, it has an jj earnings rate which would seriously distort the stock earnings rate. fsrijfc "(D) TREATMENT OF AFFILIATED GROUPS.—For purposes of this paragraph, all stock life insurance companies which aamol ^^^ members of the same affiliated group shall be treated as one stock life insurance company. "(e) AVERAGE MUTUAL EARNINGS RATE.—For purposes of this section, the average mutual earnings rate for any calendar year is the percentage (determined by the Secretary) which— "(1) the aggregate statement gain or loss from operations for such year of mutual life insurance companies, is of "(2) their aggregate average equity bases for such year. "(f) RECOMPUTATION IN SUBSEQUENT YEAR.— "(1) INCLUSION IN INCOME WHERE RECOMPUTED AMOUNT

'•^ GREATER.—In the case of any mutual life insurance company, if— «. "(A) the recomputed differential earnings amount for any taxable year, exceeds "(B) the differential earnings amount determined under this section for such taxable year, such excess shall be included in life insurance gross income for the succeeding taxable year. "(2)

DEDUCTION WHERE RECOMPUTED AMOUNT SMALLER.—In

the case of any mutual life insurance company, if— "(A) the differential earnings amount determined under this section for any taxable year, exceeds "(B) the recomputed differential earnings amount for such taxable year.

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