Page:United States Statutes at Large Volume 98 Part 1.djvu/812

 98 STAT. 764 Ante, p. 720.

.;i

PUBLIC LAW 98-369—JULY 18, 1984 subchapter L of chapter 1 of such Code and which became a member of such group after September 27, 1983, and (C) the sum of the contributions to capital received by members of the controlled group which are taxable under such part I during such taxable year from the members of the controlled group which are not taxable under such part does not exceed the aggregate dividends paid during such taxable year by the members of such group which are taxable under such part L (2) MEMBERS OF GROUP TAKEN INTO ACCOUNT.—For purposes of

paragraph (1), the members of the controlled group which are described in this paragraph are— (A) any financial institution to which section 585 or 593 of such Code applies, (B) any lending or finance business (as defined by section 542(d)), (C) any insurance company subject to tax imposed by subchapter L of chapter 1 of such Code, and (D) any securities broker. 26 USC 816 note.

Ante, p. 748.

(i) SPECIAL ELECTION To TREAT INDIVIDUAL NONCANCELLABLE ACCIDENT AND H E A L T H CONTRACTS AS CANCELLABLE.—

(1) IN GENERAL.—A mutual life insurance company may elect to treat all individual noncancellable (or guaranteed renewable) accident and health insurance contracts as though they were cancellable for purposes of section 816 of subchapter L of chapter 1 of the Internal Revenue Code of 1954. (2)

EFFECT

OF ELECTION

ON SUBSIDIARIES OF ELECTING

PARENT.— (A) TREATED AS MUTUAL U F E INSURANCE COMPANY.—Any

Ante, p. 720.

stock life insurance company which is a member of an affiliated group which has a common parent which made an election under paragraph (1), for purposes of part I of subchapter L of the Internal Revenue Code of 1954, such stock life insurance company shall be treated as though it were a mutual life insurance company. (B) INCOME OF ELECTING PARENT TAKEN INTO ACCOUNT IN DETERMINING SMALL LIFE INSURANCE COMPANY DEDUCTION OF

ANY SUBSIDIARY.—For purposes of determining the amount of the small life insurance company deduction of any controlled group which includes a mutual company which made an election under paragraph (1), the taxable income of such electing company shall be taken into account under Ante, p. 724. section 806(b)(2) of the Internal Revenue Code of 1954 (relating to phase-out of small life insurance company deduction). (3) ELECTION.—An election under paragraph (1) shall apply to the company's first taxable year beginning after December 31, 1983, and all taxable years thereafter, (4) TIME AND MANNER.—An election under paragraph (1) shall be made— (A) on the return of the taxpayer for its first taxable year beginning after December 31, 1983, and (B) in such manner as the Secretary of the Treeisury or his delegate may prescribe. 26 USC 809 note. (j) REDUCTION IN EQUITY BASE FOR MuTUAL SUCCESSOR OF FRATERNAL BENEFIT SOCIETY.—In the case of any mutual life insurance company which— (1) is the successor to a fraternal benefit society, and

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