Title: Insurance Company Tax Modernization and Parity Act of 2017
Policy area: Taxation

Summary:
Insurance Company Tax Modernization and Parity Act of 2017
This bill amends the Internal Revenue Code to allow affiliated life and non-life insurance companies to file consolidated tax returns. The bill also allows: (1) a phase-in of the full application of losses of affiliated non-life insurance companies against the taxable income of an affiliated life insurance company for taxable years beginning after December 31, 2017, and before January 1, 2024, and (2) an automatic waiver of the five-year waiting period applicable to affiliated non-life insurance companies for offset of their losses against life insurance company income.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2181 Introduced in House (IH)]

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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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Insurance Company Tax Modernization 
and Parity Act of 2017''.

SEC. 2. CONSOLIDATION OF LIFE INSURANCE COMPANIES WITH OTHER COMPANIES 
              PERMITTED.

    (a) In General.--Section 1504(b) of the Internal Revenue Code of 
1986 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 the Internal Revenue Code of 1986 is 
        amended by striking subsection (c) and by redesignating 
        subsections (d), (e), and (f) as subsections (c), (d), and (e), 
        respectively.
            (2) Section 1504 of such Code is amended by striking 
        subsection (c) and by redesignating subsections (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 insurance companies.--
        If an affiliated group includes 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 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 amended 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 inserting ``1504(b)(2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 3. PHASE-IN OF APPLICATION OF CERTAIN LOSSES AGAINST INCOME OF 
              INSURANCE COMPANIES.

    (a) Phase-In.--
            (1) In general.--For taxable years beginning after December 
        31, 2017, and before January 1, 2024, if--
                    (A) an affiliated group includes one 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 operating loss for such taxable 
                year,
        then, under regulations prescribed by the Secretary of the 
        Treasury or his delegate, the amount of such loss (including 
        carryovers from years prior to the effective date of this 
        provision) 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 taxable year to the extent of the applicable 
        percentage of such loss or the applicable percentage of the 
        taxable income of the members taxed under such section 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 
        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                                        The applicable
  beginning in:                                          percentage is:
        2018...................................................     40 
        2019...................................................     50 
        2020...................................................     60 
        2021...................................................     70 
        2022...................................................     80 
        2023...................................................     90.
    (b) No Carryback Before January 1, 2018.--To the extent that a 
consolidated net operating loss is allowed or increased by reason of 
this section or the amendments made by this Act, such loss (or increase 
in such loss, as the case may be) may not be carried back to a taxable 
year beginning before January 1, 2018.
    (c) Nontermination of Group.--No affiliated group shall terminate 
solely as a result of this section or the amendments made by this Act.
    (d) Subsidiary Stock Basis Adjustments.--A member corporation's 
basis in the stock of a subsidiary corporation shall be adjusted upon 
consolidation to reflect the preconsolidation income, gain, deduction, 
loss, distributions, and other relevant amounts during a period when 
such corporations were members of an affiliated group (determined 
without regard to section 1504(b)(2) of the Internal Revenue Code of 
1986 as in effect on the day before the date of enactment of this Act) 
but were not included in a consolidated return of such group by 
operation of section 1504(c)(2)(A) of such Code (as in effect on the 
day before the date of the enactment of this Act).
    (e) Waiver of 5-Year Waiting Period.--An automatic waiver from the 
5-year waiting period for reconsolidation provided in section 
1504(a)(3) of the Internal Revenue Code of 1986 shall be granted to any 
corporation which was previously an includible corporation but was 
subsequently deemed a nonincludible corporation as a result of becoming 
a subsidiary of a corporation which was not an includible corporation 
solely by operation of section 1504(c)(2) of such Code (as in effect on 
the day before the date of enactment of this Act), subject to such 
conditions as the Secretary may prescribe.
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