I 

115TH CONGRESS 

1ST SESSION H. R. 871 

To amend the Internal Revenue Code of 1986 to exempt premiums paid 

on non-cash-value property and casualty insurance from the taxes to 

enforce reporting on certain foreign accounts. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 6, 2017 

Mr. SMITH of Missouri (for himself, Mr. LARSON of Connecticut, and Mr. 

ROYCE of California) 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 exempt 

premiums paid on non-cash-value property and casualty 

insurance from the taxes to enforce reporting on certain 

foreign accounts. 

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

3 SECTION 1. EXEMPTION FOR PREMIUMS PAID ON NON4 CASH-VALUE PROPERTY AND CASUALTY IN5 SURANCE FROM TAXES TO ENFORCE RE6 PORTING ON CERTAIN FOREIGN ACCOUNTS. 

7 (a) IN GENERAL.—Section 1473(1) of the Internal 

8 Revenue Code of 1986 is amended by redesignating subVerDate Sep 11 2014 21:34 Feb 13, 2017 Jkt 069200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H871.IH H871

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1 paragraph (C) as subparagraph (D) and by inserting after 

2 subparagraph (B) the following new subparagraph: 

3 ‘‘(C) EXCEPTION FOR PREMIUMS PAID ON

4 NON-CASH-VALUE PROPERTY AND CASUALTY IN5 SURANCE.— 

6 ‘‘(i) IN GENERAL.—Such term shall 

7 not include any premium paid for any in8 surance contract if— 

9 ‘‘(I) such insurance contract does 

10 not have an aggregate cash value 

11 greater than zero, and 

12 ‘‘(II) no portion of the reserves, 

13 unearned premiums, or unpaid losses, 

14 with respect to such contract are 

15 taken into account under paragraph 

16 (1) or (2) of section 816(a). 

17 ‘‘(ii) CASH VALUE.—The term ‘cash 

18 value’ means any amount (determined 

19 without reduction for any charge or policy 

20 loan) that— 

21 ‘‘(I) is payable under the con22 tract to any person upon surrender, 

23 termination, cancellation, or with24 drawal, or 


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1 ‘‘(II) can be borrowed by any 

2 person under, or with regard to, the 

3 contract (including by pledging as col4 lateral). 

5 ‘‘(iii) EXCEPTIONS.—Notwithstanding 

6 clause (ii), the term ‘cash value’ shall not 

7 include any amount payable— 

8 ‘‘(I) solely by reason of the death 

9 of an individual insured under a life 

10 insurance contract, 

11 ‘‘(II) as a personal injury or sick12 ness benefit or a benefit providing in13 demnification of an economic loss in14 curred upon the occurrence of the 

15 event insured against, 

16 ‘‘(III) as a refund of a previously 

17 paid premium (less cost of insurance 

18 charges whether or not actually im19 posed) under an insurance contract 

20 (other than a life insurance contract) 

21 due to cancellation or termination of 

22 the contract, decrease in risk exposure 

23 during the effective period of the con24 tract, or arising from the correction of 


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1 a posting or similar error with regard 

2 to the premium for the contract, 

3 ‘‘(IV) as a policyholder dividend 

4 (other than a termination dividend) 

5 provided that the dividend relates to 

6 an insurance contract under which the 

7 only benefits payable are described in 

8 subclause (II), or 

9 ‘‘(V) as a return of an advance 

10 premium or premium deposit for an 

11 insurance contract for which the pre12 mium is payable at least annually if 

13 the amount of the advance premium 

14 or premium deposit does not exceed 

15 the next annual premium that will be 

16 payable under the contract.’’. 

17 (b) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to payments made after the date 

19 of the enactment of this Act. 

Æ 


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