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105TH CONGRESS
2D SESSION
H. R. 4795
To amend the Internal Revenue Code of 1986 to permit the consolidation
of life insurance companies with other companies.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 10, 1998
Mr. CRANE (for himself, Mrs. JOHNSON of Connecticut, Mrs. KENNELLY of
Connecticut, Mr. RAMSTAD, and Mr. WELLER) 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.—
(1) Section 1503 of such Code is amended by
striking subsection (c) (relating to special rule for
application of certain losses against income of insur-
ance companies taxed under section 801) and by re-
designating subsections (d), (e), and (f) as sub-
sections (b), (c), and (d), respectively.
(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.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.
(d) PHASEIN OF APPLICATION OF CERTAIN LOSSES
AGAINST INCOME OF INSURANCE COMPANIES.—For tax-
able years beginning after December 31, 1998, and before
January 1, 2005—
(1) IN GENERAL.—If—
(A) an affiliated group includes 1 or more
domestic insurance companies each of which is
subject to tax under section 801 of the Internal
Revenue Code of 1986,
(B) the common parent of such group has
elected to treat all such companies as includible
corporations, and
(C) the consolidated taxable income of the
members of the group not taxed under such
section 801 results in a consolidated net operat-
ing 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 (applicable to the sum of the
loss for the carryover year and the loss (or losses)
carried over to such year), in applicable carryover
years.
(2) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1), the applicable percentage shall be
determined in accordance with the following table:
For taxable years beginning
in:
The applicable percentage is:
1999 ...............................................
2000 ...............................................
2001 ...............................................
2002 ...............................................
2003 ...............................................
2004 ...............................................
90.
(e) ELECTION FOR PRE-2005 YEARS OF GROUPS
WITH INSURANCE COMPANIES.—For taxable years begin-
ning after December 31, 1998, and before January 1,
2005, the common parent of an affiliated group which in-
cludes 1 or more domestic insurance companies subject to
tax under section 801 may elect to treat all such insurance
companies as corporations which are not includible cor-
porations within the meaning of subsection (b) of section
1504 of such Code, provided that, as of the date of the
enactment of this section—
(1) such affiliated group included 1 or more in-
surance companies subject to tax under section 801
of such Code, and
(2) no election was in effect under section
1504(c)(2) of such Code (as in effect on the day be-
fore the date of the enactment of this Act).
(f) NO CARRYBACK BEFORE JANUARY 1, 1999.—To
the extent that a consolidated net operating loss is allowed
or increased by reason the amendments made by this sec-
tion, such loss may not be carried back to a taxable year
beginning before January 1, 1999.
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