Page:United States Statutes at Large Volume 98 Part 1.djvu/813

 PUBLIC LAW 98-369—JULY 18, 1984 (2) which assumed the surplus of such fraternal benefit society in 1950 or in March of 1961, for purposes of section 809 of the Internal Revenue Code of 1954 (as amended by this subtitle), the equity base of such mutual life insurance company shall be reduced by the amount of the surplus so assumed plus earnings thereon, (i) for taxable years before 1984, at a 7 percent interest rate, and (ii) for taxable years 1984 and following, at the average mutual earnings rate for such year. (k) SPECIAL RULE FOR CERTAIN DEBT-FINANCED ACQUISITION OF

98 STAT. 765

Ante, p. 733.

26 USC 806 note.

STOCK.—If—

(1) a life insurance company owns the stock of another corporation through a partnership of which it is a partner, (2) the stock of the corporation was acquired on January 14, 1981, and (3) such stock was acquired by debt financing, then, for purposes of determining the special deductions under section 806 of the Internal Revenue Code of 1954 (as amended by Ante, p. 724. this subtitle), the amount of tentative LICTI of such life insurance company shall be computed without taking into account any income, gain, loss, or deduction attributable to the ownership of such stock. (1) TREATMENT OF LOSSES FROM CERTAIN GUARANTEED INTEREST 26 USC 806 note. CONTRACTS.—

(1) IN GENERAL.—For purposes of determining the amount of the special deductions under section 806 of the Internal Revenue Code of 1954 (as amended by this subtitle), for any taxable year beginning before January 1, 1988, the amount of tentative LICTI of any qualified life insurance company shall be computed without taking into account any income, gain, loss, or deduction attributable to a qualified GIC. (2) QuAUFiED LIFE INSURANCE COMPANY.—For purposes of this subsection, the term "qualified life insurance company" means any life insurance company if— (A) the accrual of discount less amortization of premium for bonds and short-term investments (as shown in the first footnote to Exhibit 3 of its 1983 annual statement for life insurance companies approved by the National Association of Insurance Commissioners (but excluding separate accounts) filed in its State of domicile) exceeds $72,000,000 but does not exceed $73,000,000, and (B) such life insurance company makes an election under this subsection on its return for its first taxable year beginning after December 31, 1983. (3) QuAUFiED GIC.—The term "qualified GIC" means any group contract— (A) which is issued before January 1, 1984, (B) which specifies the contract maturity or renewal date, (C) under which funds deposited by the contract holder plus interest guaranteed at the inception of the contract for the term of the contract and net of any specified expenses are paid as directed by the contract holder, and (D) which is a pension plan contract (as defined in section 818(a) of the Internal Revenue Code of 1954). Ante, p. 752. (4) SCOPE OF ELECTION.—An election under this subsection shall apply to all qualified GIC's of a qualified life insurance company. Any such election, once made, shall be irrevocable. (5) INCOME ON UNDERLYING ASSETS TAKEN INTO ACCOUNT.—In

determining the amount of any income attributable to a quali-

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