Source: http://taxtv.com/code/00554-USCODE-2011-title26-subtitleA-chap1-subchapL-partI-subpartC-sec807/
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Matched Legal Cases: ['§807', '§807', '§807', '§211', '§1023', '§1821', '§10241', '§11302', '§1704', '§321', '§1084', '§205', '§205', '§205', '§1084', '§1084', '§10241', '§10241', '§10241', '§1023', '§1821', '§1821', '§205', '§211', '§2', '§2', '§1823', '§807']

IRC §807. Rules for certain reserves - TaxTV.com
IRC §807. Rules for certain reserves
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(B) the amount of the policyholders’ share of tax-exempt interest and the amount of the policyholder’s share of the increase for the taxable year in policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies,
(B) the amount of the policyholders’ share of tax-exempt interest and the amount of the policyholder’s share of the increase for the taxable year in policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies, exceeds
For purposes of this part (other than section 816), the amount of the life insurance reserves for any contract shall be the greater of—
(A) the net surrender value of such contract, or
(B) the reserve determined under paragraph (2).
The amount of the reserve determined under this paragraph with respect to any contract shall be determined by using—
(A) the tax reserve method applicable to such contract,
(i) the applicable Federal interest rate, or
(ii) the prevailing State assumed interest rate, and
(C) the prevailing commissioners’ standard tables for mortality and morbidity adjusted as appropriate to reflect the risks (such as substandard risks) incurred under the contract which are not otherwise taken into account.
The term “tax reserve method” means—
(I) the reserve method prescribed by the National Association of Insurance Commissioners which covers such contract (as of the date of issuance), or
(II) if no reserve method has been prescribed by the National Association of Insurance Commissioners which covers such contract, a reserve method which is consistent with the reserve method required under clause (i), (ii), or (iii) or under subclause (I) of this clause as of the date of the issuance of such contract (whichever is most appropriate).
(4) Applicable Federal interest rate; prevailing State assumed interest rate
(A) Applicable Federal interest rate
Except as provided in clause (ii), the term “applicable Federal interest rate” means the annual rate determined by the Secretary under section 846(c)(2) for the calendar year in which the contract was issued.
(ii) Election to recompute Federal interest rate every 5 years
In computing the amount of the reserve with respect to any contract to which an election under this clause applies for periods during any recomputation period, the applicable Federal interest rate shall be the annual rate determined by the Secretary under section 846(c)(2) for the 1st year of such period. No change in the applicable Federal interest rate shall be made under the preceding sentence unless such change would equal or exceed ½ of 1 percentage point.
(II) Recomputation period
(IV) Spread not available
(B) Prevailing State assumed interest rate
(ii) When rate determined
(5) Prevailing commissioners’ standard tables
The term “prevailing commissioners’ standard tables” means, with respect to any contract, the most recent commissioners’ standard tables prescribed by the National Association of Insurance Commissioners which are permitted to be used in computing reserves for that type of contract under the insurance laws of at least 26 States when the contract was issued.
(B) Insurer may use old tables for 3 years when tables change
If the prevailing commissioners’ standard tables as of the beginning of any calendar year (hereinafter in this subparagraph referred to as the “year of change”) is different from the prevailing commissioners’ standard tables as of the beginning of the preceding calendar year, the issuer may use the prevailing commissioners’ standard tables as of the beginning of the preceding calendar year with respect to any contract issued after the change and before the close of the 3-year period beginning on the first day of the year of change.
(C) Special rule for contracts for which there are no commissioners’ standard tables
If there are no commissioners’ standard tables applicable to any contract when it is issued, the mortality and morbidity tables used for purposes of paragraph (2)(C) shall be determined under regulations prescribed by the Secretary. When the Secretary by regulation changes the table applicable to a type of contract, the new table shall be treated (for purposes of subparagraph (B) and for purposes of determining the issue dates of contracts for which it shall be used) as if it were a new prevailing commissioner’s standard table adopted by the twenty-sixth State as of a date (no earlier than the date the regulation is issued) specified by the Secretary.
(D) Special rule for contracts issued before 1948
(i) a contract was issued before 1948, and
(ii) there were no commissioners’ standard tables applicable to such contract when it was issued,
(E) Special rule where more than 1 table or option applicable
(6) Statutory reserves
The term “statutory reserves” means the aggregate amount set forth in the annual statement with respect to items described in section 807(c). Such term shall not include any reserve attributable to a deferred and uncollected premium if the establishment of such reserve is not permitted under section 811(c).
(2) Issuance date in case of group contracts
For purposes of this part, the amount of the life insurance reserve for any qualified supplemental benefit—
(i) shall be computed separately as though such benefit were under a separate contract, and
(ii) shall, except to the extent otherwise provided in regulations, be the reserve taken into account for purposes of the annual statement approved by the National Association of Insurance Commissioners.
(B) Supplemental benefits which are not qualified supplemental benefits
(C) Qualified supplemental benefit
For purposes of this paragraph, the term “qualified supplemental benefit” means any supplemental benefit described in subparagraph (D) if—
(D) Supplemental benefits
(4) Certain contracts issued by foreign branches of domestic life insurance companies
For purposes of subparagraph (A), the term “qualified foreign contract” means any contract issued by a foreign life insurance branch (which has its principal place of business in a foreign country) of a domestic life insurance company if—
(5) Treatment of substandard risks
(A) Separate computation
(B) Qualified substandard risk
For purposes of subparagraph (A), the term “qualified substandard risk” means any substandard risk if—
(i) the insurance company maintains a separate reserve for such risk,
(ii) there is a separately identified premium or charge for such risk,
(iii) the amount of the net surrender value under the contract is not increased or decreased by reason of such risk, and
(iv) the net surrender value under the contract is not regularly used to pay premium charges for such risk.
(C) Limitation on amount of life insurance reserve
(D) Limitation on amount of contracts to which paragraph applies
(6) Special rules for contracts issued before January 1, 1989, under existing plans of insurance, with term insurance or annuity benefits
For purposes of this paragraph, the term “existing plan of insurance” means, with respect to any contract, any plan of insurance which was filed by the company using such contract in one or more States before January 1, 1984, and is on file in the appropriate State for such contract.
(7) Special rules for treatment of certain nonlife reserves
(i) the opening balance of the items referred to in subparagraph (C), and
(ii) Termination as life insurance company
(C) Description of items
(1) 10-year spread
For purposes of this part, if the basis for determining any item referred to in subsection (c) as of the close of any taxable year differs from the basis for such determination as of the close of the preceding taxable year, then so much of the difference between—
(i) the amount of the item at the close of the taxable year, computed on the new basis, and
(ii) the amount of the item at the close of the taxable year, computed on the old basis,
(i) if the amount determined under subparagraph (A)(i) exceeds the amount determined under subparagraph (A)(ii), 1/10 of such excess shall be taken into account, for each of the succeeding 10 taxable years, as a deduction under section 805(a)(2); or
(ii) if the amount determined under subparagraph (A)(ii) exceeds the amount determined under subparagraph (A)(i), 1/10 of such excess shall be included in gross income, for each of the 10 succeeding taxable years, under section 803(a)(2).
(Added Pub. L. 98–369, div. A, title II, §211(a), July 18, 1984, 98 Stat. 726; amended Pub. L. 99– 4, title X, §1023(b), title XVIII, §1821(a), (s), Oct. 22, 1986, 100 Stat. 2399, 2837, 2843; Pub. L. 100–203, title X, §10241(a)–(b)(2)(A), Dec. 22, 1987, 101 Stat. 1330–419, 1330–420; Pub. L. 101–508, title XI, §11302(a), Nov. 5, 1990, 104 Stat. 1388–449; Pub. L. 104–188, title I, §1704(t)(61), Aug. 20, 1996, 110 Stat. 1890; Pub. L. 104–191, title III, §321(b), Aug. 21, 1996, 110 Stat. 2058; Pub. L. 105–34, title X, §1084(b)(2), Aug. 5, 1997, 111 Stat. 954; Pub. L. 108–218, title II, §205(b)(1), (2), Apr. 10, 2004, 118 Stat. 610.)
2004—Subsecs. (a)(2)(B), (b)(1)(B). Pub. L. 108–218, §205(b)(1), struck out “the sum of (i)” before “the amount” and struck out “plus (ii) any excess described in section 809(a)(2) for the taxable year,” after “to which section 264(f) applies,”.
Subsec. (d)(1). Pub. L. 108–218, §205(b)(2)(A), substituted “paragraph (6)” for “section 809(b)(4)(B)” in concluding provisions.
1997—Subsec. (a)(2)(B). Pub. L. 105–34, §1084(b)(2)(A), substituted “interest and the amount of the policyholder’s share of the increase for the taxable year in policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies,” for “interest,”.
Subsec. (b)(1)(B). Pub. L. 105–34, §1084(b)(2)(B), substituted “interest and the amount of the policyholder’s share of the increase for the taxable year in policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies,” for “interest,”.
1996—Subsec. (d)(3)(A)(iii). Pub. L. 104–191 inserted “(other than a qualified long-term care insurance contract, as defined in section 7702B(b))” after “insurance contract”.
Subsec. (d)(3)(B)(ii). Pub. L. 104–188 substituted “Commissioners’ Annuities” for “Commissoners’ Annuities”.
1987—Subsec. (c). Pub. L. 100–203, §10241(b)(2)(A), substituted “whichever of the following rates is the highest as of the time such obligation first did not involve life, accident, or health contingencies: the applicable Federal interest rate under subsection (d)(2)(B)(i), the prevailing State assumed interest rate under subsection (d)(2)(B)(ii), or the rate of interest assumed by the company in determining the guaranteed benefit.” for “the higher of the prevailing State assumed interest rate as of the time such obligation first did not involve life, accident, or health contingencies or the rate of interest assumed by the company (as of such time) in determining the guaranteed benefit.” in third to last sentence.
Subsec. (d)(2)(B). Pub. L. 100–203, §10241(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the prevailing State assumed interest rate, and”.
Subsec. (d)(4). Pub. L. 100–203, §10241(b)(1), substituted “Applicable Federal interest rate; prevailing State assumed interest rate” for “Prevailing State assumed interest rate” in heading and amended text generally, revising and restating as subpars. (A) and (B) provisions of former subpars. (A) to (D).
1986—Subsec. (c). Pub. L. 99– 4, §1023(b), inserted at end “For purposes of paragraph (2) and section 805(a)(1), the amount of the unpaid losses (other than losses on life insurance contracts) shall be the amount of the discounted unpaid losses as defined in section 846.”
Pub. L. 99– 4, §1821(a), inserted at end “In no case shall the amount determined under paragraph (3) for any contract be less than the net surrender value of such contract.”
Subsec. (d)(5)(C). Pub. L. 99– 4, §1821(s), inserted at end “When the Secretary by regulation changes the table applicable to a type of contract, the new table shall be treated (for purposes of subparagraph (B) and for purposes of determining the issue dates of contracts for which it shall be used) as if it were a new prevailing commissioner’s standard table adopted by the twenty-sixth State as of a date (no earlier than the date the regulation is issued) specified by the Secretary.”
Pub. L. 108–218, title II, §205(c), Apr. 10, 2004, 118 Stat. 610, provided that: “The amendments made by this section [amending this section and sections 808, 812, 817, and 842 of this title and repealing section 809 of this title] shall apply to taxable years beginning after December 31, 2004.”
Section 11302(b) of Pub. L. 101–508 provided that: “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning on or after September 30, 1990.”
Section 10241(c) of Pub. L. 100–203 provided that: “The amendments made by this section [amending this section and section 812 of this title] shall apply to contracts issued in taxable years beginning after December 31, 1987.”
Amendment by section 1023(b) of Pub. L. 99– 4 applicable to taxable years beginning after Dec. 31, 1986, except as otherwise provided, see section 1023(e) of Pub. L. 99– 4, set out as an Effective Date note under section 846 of this title.
Amendment by section 1821(a), (s) of Pub. L. 99– 4 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99– 4, set out as a note under section 48 of this title.
Section 217(f) of subtitle A (§§211–219) of title II of div. A of Pub. L. 98–369, as amended by Pub. L. 99– 4, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:
Section 217(n) of Pub. L. 98–369, as amended by Pub. L. 99– 4, §2, title XVIII, §1823, Oct. 22, 1986, 100 Stat. 2095, 2845, provided that: “A company shall be treated as meeting the requirements of section 807(d)(3)(A)(iii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by this Act, with respect to any directly-written noncancellable accident and health insurance contract (whether under existing or new plans of insurance) for any taxable year if—
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