I 
111TH CONGRESS 
1ST SESSION H. R. 3399 
To amend the Internal Revenue Code of 1986 to permit the consolidation 
of life insurance companies with other companies. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 30, 2009 
Mr. LARSON of Connecticut (for himself and Mr. TIBERI) 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. CONSOLIDATION OF LIFE INSURANCE COMPA-
NIES WITH OTHER COMPANIES PERMITTED. 
(a) IN GENERAL.—Section 1504(b) of the Internal 
Revenue Code of 1986 (defining includible corporation) is 
amended by striking paragraph (2) and by redesignating 
paragraphs (3) through (8) as paragraphs (2) through 
(7), respectively. 
(b) CONFORMING AMENDMENTS.— 
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(1) Section 1503 of the Internal Revenue Code 
of 1986 is amended by striking subsection (c) (relat-
ing to special rule for application of certain losses 
against income of insurance companies taxed under 
section 801) and by redesignating subsections (d), 
(e), and (f) as subsections (c), (d), and (e), respec-
tively. 
(2) Section 1504 of such Code is amended by 
striking subsection (c) and by redesignating sub-
sections (d), (e), and (f) as subsections (c), (d), and 
(e), respectively. 
(3) Section 243(b)(2)(A) of such Code is 
amended 
by 
striking 
‘‘sections 
1504(b)(2), 
1504(b)(4), and 1504(c)’’ and inserting ‘‘section 
1504(b)(3)’’. 
(4) Section 805(a)(4)(E) of such Code is 
amended by striking ‘‘1504(b)(3)’’ and inserting 
‘‘1504(b)(2)’’. 
(5) Section 818(e)(1) of such Code is amended 
to read as follows: 
‘‘(1) ITEMS OF COMPANIES OTHER THAN IN-
SURANCE
COMPANIES.—If an affiliated group in-
cludes members which are and which are not taxed 
under section 801, all items of the members of such 
group which are not taxed under section 801 shall 
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not be taken into account in determining the amount 
of the tentative LICTI of members of such group 
which are taxed under section 801.’’. 
(6) Section 832(b)(5)(D)(ii)(II) of such Code is 
amended by striking ‘‘1504(b)(3)’’ and inserting 
‘‘1504(b)(2)’’. 
(7) Section 864(e)(5)(A) of such Code is 
amended by striking ‘‘paragraph (4)’’ and inserting 
‘‘paragraph (3)’’. 
(8) Section 936(i)(5)(A) of such Code is 
amended by striking ‘‘section 1504(b)(3) or (4)’’ 
and inserting ‘‘section 1504(b)(2) or (3)’’. 
(9) Section 952(c)(1)(B)(vii)(II) of such Code 
is amended by striking ‘‘1504(b)(3)’’ and inserting 
‘‘1504(b)(2)’’. 
(10) Section 953(d)(3) of such Code is amend-
ed by striking ‘‘1503(d)’’ and inserting ‘‘1503(c)’’. 
(11) Section 954(h)(4)(F)(ii) of such Code is 
amended by striking ‘‘1504(b)(3)’’ and inserting 
‘‘1504(b)(2)’’. 
(12) Section 6166(b)(10)(B)(ii)(V) of such 
Code is amended by striking ‘‘1504(b)(3)’’ and in-
serting ‘‘1504(b)(2)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to— 
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(1) in the case of an affiliated group with re-
spect to which an election is in effect under section 
1504(c)(2) of the Internal Revenue Code of 1986 
(as in effect before the date of the enactment of this 
Act) for the first taxable year ending on or after the 
date of the enactment of this Act, taxable years be-
ginning after such date, and 
(2) in the case of an affiliated group the com-
mon parent of which elects (at such time and in 
such manner as the Secretary may provide) to have 
the amendments made by this section apply to any 
taxable year beginning after the date of the enact-
ment of this Act (and not described in paragraph 
(3)), such taxable year and all subsequent taxable 
years, and 
(3) in any other case, taxable years beginning 
after the date which is 3 years after the date of the 
enactment of this Act. 
SEC. 2. PHASE-IN OF APPLICATION OF CERTAIN LOSSES 
AGAINST INCOME OF INSURANCE COMPA-
NIES. 
(a) PHASE-IN.— 
(1) IN GENERAL.—In the case of the first tax-
able year of an affiliated group to which the amend-
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ments made by section 1 apply and each of the 5 
succeeding taxable years, if— 
(A) an affiliated group includes 1 or more 
domestic insurance companies subject to tax 
under section 801 of the Internal Revenue Code 
of 1986, and 
(B) the consolidated taxable income of the 
members of the group not taxed under such 
section 801 results in a consolidated net oper-
ating loss for such taxable year, 
then, under regulations prescribed by the Secretary 
of the Treasury or his delegate, the amount of such 
loss which cannot be absorbed in the applicable 
carryback periods against the taxable income of such 
members not taxed under such section 801 shall be 
taken into account in determining the consolidated 
taxable income of the affiliated group for such tax-
able year to the extent of the applicable percentage 
of such loss or the applicable percentage of the tax-
able income of the members taxed under such sec-
tion 801, whichever is less. The unused portion of 
such loss shall be available as a carryover, subject to 
the same limitations (but determined based on the 
applicable percentage with respect to the year to 
which carried and applicable to the sum of the loss 
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