I 
108TH CONGRESS 
1ST SESSION 
H. R. 808
To amend the Internal Revenue Code of 1986 to repeal the provision taxing 
policyholder dividends of mutual life insurance companies and to repeal 
the policyholders surplus account provisions. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 13, 2003
Mr. HOUGHTON (for himself, Mr. NEAL of Massachusetts, Mr. KLECZKA, Mr. 
CRANE, Mr. BECERRA, Mr. HERGER, Mr. RANGEL, Mr. MCINNIS, Mr. 
TANNER, Mr. BRADY of Texas, Mrs. JOHNSON of Connecticut, Mr. POM-
EROY, Mr. RAMSTAD, and Mr. RYAN of Wisconsin) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to repeal 
the provision taxing policyholder dividends of mutual life 
insurance companies and to repeal the policyholders sur-
plus account provisions.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Life Insurance Tax 
Simplification Act of 2003’’.
SEC. 2. REPEAL OF REDUCTION OF DEDUCTIONS FOR MU-
TUAL LIFE INSURANCE COMPANIES. 
(a) IN GENERAL.—Section 809 of the Internal Rev-
enue Code of 1986 (relating to reductions in certain de-
duction of mutual life insurance companies) is hereby re-
pealed. 
(b) CONFORMING AMENDMENTS.—
(1) Subsections (a)(2)(B) and (b)(1)(B) of sec-
tion 807 of such Code are each amended by striking 
‘‘the sum of (i)’’ and by striking ‘‘plus (ii) any ex-
cess described in section 809(a)(2) for the taxable 
year,’’. 
(2)(A) The last sentence of section 807(d)(1) of 
such 
Code 
is 
amended 
by 
striking 
‘‘section 
809(b)(4)(B)’’ and inserting ‘‘paragraph (6)’’. 
(B) Subsection (d) of section 807 of such Code 
is amended by adding at the end the following new 
paragraph: 
‘‘(6) STATUTORY RESERVES.—The term ‘statu-
tory reserves’ means the aggregate amount set forth 
in the annual statement with respect to items de-
scribed in section 807(c). Such term shall not in-
clude any reserve attributable to a deferred and un-
collected premium if the establishment of such re-
serve is not permitted under section 811(c).’’
(3) Subsection (c) of section 808 of such Code 
is amended to read as follows: 
‘‘(c) AMOUNT OF DEDUCTION.—The deduction for 
policyholder dividends for any taxable year shall be an 
amount equal to the policyholder dividends paid or accrued 
during the taxable year.’’
(4) Subparagraph (A) of section 812(b)(3) of 
such Code is amended by striking ‘‘sections 808 and 
809’’ and inserting ‘‘section 808’’. 
(5) Subsection (c) of section 817 of such Code 
is amended by striking ‘‘(other than section 809)’’. 
(6) Subsection (c) of section 842 of such Code 
is amended by striking paragraph (3) and by redes-
ignating paragraph (4) as paragraph (3). 
(7) The table of sections for subpart C of part 
I of subchapter L of chapter 1 of such Code is 
amended by striking the item relating to section 
809. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 3. REPEAL OF POLICYHOLDERS SURPLUS ACCOUNT 
PROVISIONS. 
(a) IN GENERAL.—Section 815 of the Internal Rev-
enue Code of 1986 (relating to distributions to share-
holders from pre-1984 policyholders surplus account) is 
hereby repealed. 
(b) CONFORMING AMENDMENTS.—
(1) Section 801 of such Code is amended by 
striking subsection (c). 
(2) The table of sections for subpart D of part 
I of subchapter L of chapter 1 of such Code is 
amended by striking the item relating to section 
815. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2002.
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