I 

115TH CONGRESS 

1ST SESSION H. R. 2181 

To amend the Internal Revenue Code of 1986 to permit the consolidation 

of life insurance companies with other companies. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 26, 2017 

Mr. TIBERI (for himself, Mr. LARSON of Connecticut, Mr. PAULSEN, and Mr. 

REED) introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to permit 

the consolidation of life insurance companies with other 

companies. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Insurance Company 

5 Tax Modernization and Parity Act of 2017’’. 

6 SEC. 2. CONSOLIDATION OF LIFE INSURANCE COMPANIES 

7 WITH OTHER COMPANIES PERMITTED. 

8 (a) IN GENERAL.—Section 1504(b) of the Internal 

9 Revenue Code of 1986 is amended by striking paragraph 


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1 (2) and by redesignating paragraphs (3) through (8) as 

2 paragraphs (2) through (7), respectively. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) Section 1503 of the Internal Revenue Code 

5 of 1986 is amended by striking subsection (c) and 

6 by redesignating subsections (d), (e), and (f) as sub7 sections (c), (d), and (e), respectively. 

8 (2) Section 1504 of such Code is amended by 

9 striking subsection (c) and by redesignating sub10 sections (d), (e), and (f) as subsections (c), (d), and 

11 (e), respectively. 

12 (3) Section 243(b)(2)(A) of such Code is 

13 amended by striking ‘‘sections 1504(b)(2), 

14 1504(b)(4), and 1504(c)’’ and inserting ‘‘section 

15 1504(b)(3)’’. 

16 (4) Section 805(a)(4)(E) of such Code is 

17 amended by striking ‘‘1504(b)(3)’’ and inserting 

18 ‘‘1504(b)(2)’’. 

19 (5) Section 818(e)(1) of such Code is amended 

20 to read as follows: 

21 ‘‘(1) ITEMS OF COMPANIES OTHER THAN IN22 SURANCE COMPANIES.—If an affiliated group in23 cludes members which are and which are not taxed 

24 under section 801, all items of the members of such 

25 group which are not taxed under section 801 shall 


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1 not be taken into account in determining the amount 

2 of the tentative LICTI of members of such group 

3 which are taxed under section 801.’’. 

4 (6) Section 832(b)(5)(D)(ii)(II) of such Code is 

5 amended by striking ‘‘1504(b)(3)’’ and inserting 

6 ‘‘1504(b)(2)’’. 

7 (7) Section 864(e)(5)(A) of such Code is 

8 amended by striking ‘‘paragraph (4)’’ and inserting 

9 ‘‘paragraph (3)’’. 

10 (8) Section 936(i)(5)(A) of such Code is 

11 amended by striking ‘‘section 1504(b)(3) or (4)’’ 

12 and inserting ‘‘section 1504(b)(2) or (3)’’. 

13 (9) Section 952(c)(1)(B)(vii)(II) of such Code 

14 is amended by striking ‘‘1504(b)(3)’’ and inserting 

15 ‘‘1504(b)(2)’’. 

16 (10) Section 953(d)(3) of such Code is amend17 ed by striking ‘‘1503(d)’’ and inserting ‘‘1503(c)’’. 

18 (11) Section 954(h)(4)(F)(ii) of such Code is 

19 amended by striking ‘‘1504(b)(3)’’ and inserting 

20 ‘‘1504(b)(2)’’. 

21 (12) Section 6166(b)(10)(B)(ii)(V) of such 

22 Code is amended by striking ‘‘1504(b)(3)’’ and in23 serting ‘‘1504(b)(2)’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2017. 

4 SEC. 3. PHASE-IN OF APPLICATION OF CERTAIN LOSSES 

5 AGAINST INCOME OF INSURANCE COMPA6 NIES. 

7 (a) PHASE-IN.— 

8 (1) IN GENERAL.—For taxable years beginning 

9 after December 31, 2017, and before January 1, 

10 2024, if— 

11 (A) an affiliated group includes one or 

12 more domestic insurance companies subject to 

13 tax under section 801 of the Internal Revenue 

14 Code of 1986; and 

15 (B) the consolidated taxable income of the 

16 members of the group not taxed under such 

17 section 801 results in a consolidated net oper18 ating loss for such taxable year, 

19 then, under regulations prescribed by the Secretary 

20 of the Treasury or his delegate, the amount of such 

21 loss (including carryovers from years prior to the ef22 fective date of this provision) which cannot be ab23 sorbed in the applicable carryback periods against 

24 the taxable income of such members not taxed under 

25 such section 801 shall be taken into account in deVerDate Sep 11 2014 00:51 Apr 28, 2017 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2181.IH H2181

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1 termining the consolidated taxable income of the af2 filiated group for such taxable year to the extent of 

3 the applicable percentage of such loss or the applica4 ble percentage of the taxable income of the members 

5 taxed under such section 801, whichever is less. The 

6 unused portion of such loss shall be available as a 

7 carryover, subject to the same limitations (but deter8 mined based on the applicable percentage with re9 spect to the year to which carried and applicable to 

10 the sum of the loss for the carryover year and the 

11 loss (or losses) carried over to such year), in applica12 ble carryover years. 

13 (2) APPLICABLE PERCENTAGE.—For purposes 

14 of paragraph (1), the applicable percentage shall be 

15 determined in accordance with the following table: 

For taxable years The applicable 

beginning in: percentage is: 

2018 ................................................................................................... 40

2019 ................................................................................................... 50

2020 ................................................................................................... 60

2021 ................................................................................................... 70

2022 ................................................................................................... 80

2023 ................................................................................................... 90. 

16 (b) NO CARRYBACK BEFORE JANUARY 1, 2018.—To 

17 the extent that a consolidated net operating loss is allowed 

18 or increased by reason of this section or the amendments 

19 made by this Act, such loss (or increase in such loss, as 

20 the case may be) may not be carried back to a taxable 

21 year beginning before January 1, 2018. 


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1 (c) NONTERMINATION OF GROUP.—No affiliated 

2 group shall terminate solely as a result of this section or 

3 the amendments made by this Act. 

4 (d) SUBSIDIARY STOCK BASIS ADJUSTMENTS.—A 

5 member corporation’s basis in the stock of a subsidiary 

6 corporation shall be adjusted upon consolidation to reflect 

7 the preconsolidation income, gain, deduction, loss, dis8 tributions, and other relevant amounts during a period 

9 when such corporations were members of an affiliated 

10 group (determined without regard to section 1504(b)(2) 

11 of the Internal Revenue Code of 1986 as in effect on the 

12 day before the date of enactment of this Act) but were 

13 not included in a consolidated return of such group by op14 eration of section 1504(c)(2)(A) of such Code (as in effect 

15 on the day before the date of the enactment of this Act). 

16 (e) WAIVER OF 5-YEAR WAITING PERIOD.—An auto17 matic waiver from the 5-year waiting period for reconsoli18 dation provided in section 1504(a)(3) of the Internal Rev19 enue Code of 1986 shall be granted to any corporation 

20 which was previously an includible corporation but was 

21 subsequently deemed a nonincludible corporation as a re22 sult of becoming a subsidiary of a corporation which was 

23 not an includible corporation solely by operation of section 

24 1504(c)(2) of such Code (as in effect on the day before 


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1 the date of enactment of this Act), subject to such condi2 tions as the Secretary may prescribe. 

Æ 


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