Collapse to view only § 811. Accounting provisions
- § 811. Accounting provisions
- § 812. Definition of company’s share and policyholder’s share
- [§ 813. Repealed.
- § 814. Contiguous country branches of domestic life insurance companies
- [§ 815. Repealed.
§ 811. Accounting provisions
(a) Method of accounting
All computations entering into the determination of the taxes imposed by this part shall be made—
(1) under an accrual method of accounting, or
(2) to the extent permitted under regulations prescribed by the Secretary, under a combination of an accrual method of accounting with any other method permitted by this chapter (other than the cash receipts and disbursements method).
To the extent not inconsistent with the preceding sentence or any other provision of this part, all such computations shall be made in a manner consistent with the manner required for purposes of the annual statement approved by the National Association of Insurance Commissioners.
(b) Amortization of premium and accrual of discount
(1) In general
The appropriate items of income, deductions, and adjustments under this part shall be adjusted to reflect the appropriate amortization of premium and the appropriate accrual of discount attributable to the taxable year on bonds, notes, debentures, or other evidences of indebtedness held by a life insurance company. Such amortization and accrual shall be determined—
(A) in accordance with the method regularly employed by such company, if such method is reasonable, and
(B) in all other cases, in accordance with regulations prescribed by the Secretary.
(2) Special rules
(A) Amortization of bond premium
(B) Convertible evidence of indebtedness
(3) Exception
No accrual of discount shall be required under paragraph (1) on any bond (as defined in section 171(d)), except in the case of discount which is—
(A) interest to which section 103 applies, or
(B) original issue discount (as defined in section 1273).
(c) No double counting
Nothing in this part shall permit—
(1) a reserve to be established for any item unless the gross amount of premiums and other consideration attributable to such item are required to be included in life insurance gross income,
(2) the same item to be counted more than once for reserve purposes, or
(3) any item to be deducted (either directly or as an increase in reserves) more than once.
(d) Method of computing reserves on contract where interest is guaranteed beyond end of taxable year
For purposes of this part (other than section 816), amounts in the nature of interest to be paid or credited under any contract for any period which is computed at a rate which—
(1) exceeds the interest rate in effect under section 808(g) for the contract for such period, and
(2) is guaranteed beyond the end of the taxable year on which the reserves are being computed,
shall be taken into account in computing the reserves with respect to such contract as if such interest were guaranteed only up to the end of the taxable year.
(e) Short taxable years
(Added and amended Pub. L. 98–369, div. A, title I, § 42(a)(8), title II, § 211(a), July 18, 1984, 98 Stat. 557, 740; Pub. L. 100–647, title II, § 2004(p)(1), Nov. 10, 1988, 102 Stat. 3608; Pub. L. 115–97, title I, § 13517(b)(2), Dec. 22, 2017, 131 Stat. 2147.)
§ 812. Definition of company’s share and policyholder’s share
(a) Company’s share
(b) Policyholder’s share
(Added Pub. L. 98–369, div. A, title II, § 211(a), July 18, 1984, 98 Stat. 741; amended Pub. L. 99–514, title XVIII, § 1821(i), Oct. 22, 1986, 100 Stat. 2840; Pub. L. 100–203, title X, § 10241(b)(2)(B), Dec. 22, 1987, 101 Stat. 1330–420; Pub. L. 100–647, title I, § 1018(h)(1), title II, § 2004(p)(2), Nov. 10, 1988, 102 Stat. 3583, 3608; Pub. L. 104–188, title I, § 1602(b)(2), Aug. 20, 1996, 110 Stat. 1833; Pub. L. 105–34, title X, § 1084(b)(3), Aug. 5, 1997, 111 Stat. 955; Pub. L. 108–218, title II, § 205(b)(4), Apr. 10, 2004, 118 Stat. 610; Pub. L. 113–295, div. A, title II, § 221(a)(41)(G), Dec. 19, 2014, 128 Stat. 4044; Pub. L. 115–97, title I, § 13518(a), Dec. 22, 2017, 131 Stat. 2148.)
[§ 813. Repealed. Pub. L. 100–203, title X, § 10242(c)(1), Dec. 22, 1987, 101 Stat. 1330–423]
§ 814. Contiguous country branches of domestic life insurance companies
(a) Exclusion of items
In the case of a domestic mutual insurance company which—
(1) is a life insurance company,
(2) has a contiguous country life insurance branch, and
(3) makes the election provided by subsection (g) with respect to such branch,
there shall be excluded from each item involved in the determination of life insurance company taxable income the items separately accounted for in accordance with subsection (c).
(b) Contiguous country life insurance branch
For purposes of this section, the term contiguous country life insurance branch means a branch which—
(1) issues insurance contracts insuring risks in connection with the lives or health of residents of a country which is contiguous to the United States,
(2) has its principal place of business in such contiguous country, and
(3) would constitute a mutual life insurance company if such branch were a separate domestic insurance company.
For purposes of this section, the term “insurance contract” means any life, health, accident, or annuity contract or reinsurance contract or any contract relating thereto.
(c) Separate accounting required
Any taxpayer which makes the election provided by subsection (g) shall establish and maintain a separate account for the various income, exclusion, deduction, asset, reserve, liability, and surplus items properly attributable to the contracts described in subsection (b). Such separate accounting shall be made—
(1) in accordance with the method regularly employed by such company, if such method clearly reflects income derived from, and the other items attributable to, the contracts described in subsection (b), and
(2) in all other cases, in accordance with regulations prescribed by the Secretary.
(d) Recognition of gain on assets in branch account
(e) Transactions between contiguous country branch and domestic life insurance company
(1) Reimbursement for home office services, etc.
(2) Repatriation of income
(A) In general
(B) Limitation
The addition provided by subparagraph (A) for the taxable year with respect to any contiguous country life insurance branch shall not exceed the amount by which—
(i) the aggregate decrease in the tentative LICTI of the domestic life insurance company for the taxable year and for all prior taxable years resulting solely from the application of subsection (a) of this section with respect to such branch, exceeds
(ii) the amount of additions to tentative LICTI pursuant to subparagraph (A) with respect to such contiguous country branch for all prior taxable years.
(C) Transitional rule
(f) Other rules
(1) Treatment of foreign taxes
(2) United States source income allocable to contiguous country branch
(g) Election
(h) Special rule for domestic stock life insurance companies
(Added Pub. L. 98–369, div. A, title II, § 211(a), July 18, 1984, 98 Stat. 744; amended Pub. L. 105–34, title XI, § 1131(c)(1), Aug. 5, 1997, 111 Stat. 980; Pub. L. 115–97, title I, § 14301(c)(5), Dec. 22, 2017, 131 Stat. 2222.)
[§ 815. Repealed. Pub. L. 115–97, title I, § 13514(a), Dec. 22, 2017, 131 Stat. 2143]