Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 10 - Other Entities and Miscellaneous › Chapter 03 - Insurance Companies › Section 35-3-10-03-101 - DEDUCTIONS

Current through June 25, 2024
1. Insurance companies may deduct from gross
				  income the deductions provided by statute on the same basis and the same
				  measure as other corporations. Deductions shall be computed on an incurred
				  basis except that, where taxpayer reports income on a receipts basis,
				  deductions must be computed on a paid basis.
2. Amounts representing rebates, return
				  premiums and premiums on policies not taken may be deducted from income when
				  such amounts have been included in income in the current year or prior years.
				  Dividends (other than dividends paid to stockholders as stock dividends) or
				  distributions which represent a return of premiums paid, or deposited, by
				  policy holders are deductible when actually paid to policy holders, or are
				  definitely and irrevocably placed to the credit of policy holders subject to
				  withdrawal on demand; or treated and consummated as a reduction of premiums due
				  from policy holders. Dividends or distributions, which are credited to future
				  premiums payable by policy holders, are not deductible from gross income when
				  such dividends or distributions are not credited or paid to the prospective
				  policy holder unless the policy is renewed. Deductible policy dividends on
				  direct business and reinsurance assumed must be reduced by dividends on
				  reinsurance ceded.
3. Foreign,
				  non-life companies using the apportionment method of reporting income will
				  determine underwriting income on a net basis. No other companies may deduct
				  reinsurance ceded unless the assuming company is, or would be, required to
				  report the income therefrom under the direct accounting method. Generally, this
				  will permit domestic companies to deduct reinsurance ceded to Mississippi
				  companies.
4. In computing losses
				  and claims any estimate for losses incurred but not reported during the taxable
				  year should not be included. As payments on policies, there shall be reported
				  all death, disability and other policy claims paid within the year on
				  Mississippi contracts, including fire, accident and liability losses, matured
				  endowments, annuities, payments on installment policies and surrender values
				  actually paid. All losses and claims paid must be reduced by recoveries from
				  reinsurance ceded, when the reinsurance premiums paid have been taken as a
				  deduction from gross income.
5. The
				  statute provides that there may be deducted "the net additions required by law
				  to be made within the taxable year to reserve funds when such reserve funds are
				  maintained for the purpose of liquidating policies at maturity." Such
				  deductible reserve additions do not include additions to a security reserve,
				  investment reserve or any reserve other than those reserves normally included
				  with and recognized as a part of the true policy reserves.
6. Said additions must reflect reinsurance to
				  the extent that same is reflected in premium income reported. Life companies
				  which do not include in gross income the increase in deferred and uncollected
				  premiums must reduce the net increase in reserves by the increase in net
				  deferred and uncollected premiums.
7. When Mississippi unearned premiums cannot
				  be accounted for specifically by companies which use the direct accounting
				  method of reporting, said premiums shall be computed by taking the ratios on a
				  net basis between company-wide unearned premiums and company-wide net premiums
				  written, by line of business and applying said ratios to the premium income
				  reported, less return premiums, by line of business.