26 U.S.C. § 816
For purposes of this subtitle, the term "life insurance company" means an insurance company which is engaged in the business of issuing life insurance and annuity contracts (either separately or combined with accident and health insurance), or noncancellable contracts of health and accident insurance, if-
comprise more than 50 percent of its total reserves (as defined in subsection (c)). For purposes of the preceding sentence, the term "insurance company" means any company more than half of the business of which during the taxable year is the issuing of insurance or annuity contracts or the reinsuring of risks underwritten by insurance companies.
For purposes of this part, the term "life insurance reserves" means amounts-
Except-
in addition to the requirements set forth in paragraph (1), life insurance reserves must be required by law.
In the case of an assessment life insurance company or association, the term "life insurance reserves" includes-
For purposes of this subsection, subsection (a), and subsection (c), the amount of any reserve (or portion thereof) for any taxable year shall be the mean of such reserve (or portion thereof) at the beginning and end of the taxable year.
For purposes of subsection (a), the term "total reserves" means-
For purposes only of determining under subsection (a) whether or not an insurance company is a life insurance company, the life insurance reserves, and the total reserves, shall each be reduced by an amount equal to the mean of the aggregates, at the beginning and end of the taxable year, of the policy loans outstanding with respect to contracts for which life insurance reserves are maintained.
For purposes of this part, guaranteed renewable life, accident, and health insurance shall be treated in the same manner as noncancellable life, accident, and health insurance.
For purposes only of determining under subsection (a) whether or not an insurance company is a life insurance company, amounts set aside and held at interest to satisfy obligations under contracts which do not contain permanent guarantees with respect to life, accident, or health contingencies shall not be included in reserves described in paragraph (1) or (3) of subsection (c).
A burial or funeral benefit insurance company engaged directly in the manufacture of funeral supplies or the performance of funeral services shall not be taxable under this part but shall be taxable under section 831.
For purposes of this section and section 842(b)(2)(B)(i), the terms "life insurance reserves" and "total reserves" shall not include deficiency reserves.
26 U.S.C. § 816
EDITORIAL NOTES
PRIOR PROVISIONSA prior section 816, act Aug. 16, 1954, ch. 736, §816, as added Mar. 13, 1956, ch. 83, §2, 70 Stat. 46, related to taxation of foreign life insurance companies, prior to the general revision of this part by Pub. L. 86-69, §2(a).
AMENDMENTS1988-Subsec. (g). Pub. L. 100-647, §1010(f)(6), substituted "section 831" for "section 821 or section 831". Subsec. (h). Pub. L. 100-647, §2004(q)(1), substituted "section 842(b)(2)(B)(i)" for "section 842(c)(1)(A)". 1987-Subsec. (h). Pub. L. 100-203 substituted "section 842(c)(1)(A)" for "section 813(a)(4)(B)". 1986-Subsec. (h). Pub. L. 99-514 added subsec. (h).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 1010(f)(6) of Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title. Amendment by section 2004(q)(1) of Pub. L. 100-647 effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987, Pub. L. 100-203, title X, to which such amendment relates, see section 2004(u) of Pub. L. 100-647, set out as a note under section 56 of this title.
EFFECTIVE DATE OF 1987 AMENDMENT Pub. L. 100-203, title X, §10242(d), Dec. 22, 1987, 101 Stat. 1330-423, provided that: "The amendments made by this section [amending this section and sections 842, 864, and 4371 of this title and repealing section 813 of this title] shall apply to taxable years beginning after December 31, 1987."
EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99-514 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. 99-514, set out as a note under section 48 of this title.
EFFECTIVE DATESection applicable to taxable years beginning after Dec. 31, 1983, see section 215 of Pub. L. 98-369, set out as a note under section 801 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101-1147 and 1171-1177] or title XVIII [§§1800-1899A] of Pub. L. 99-514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99-514, as amended, set out as a note under section 401 of this title.
SPECIAL ELECTION TO TREAT INDIVIDUAL NONCANCELLABLE ACCIDENT AND HEALTH CONTRACTS AS CANCELLABLEPub. L. 98-369, div. A, title II, §217(i), July 18, 1984, 98 Stat. 764, as amended by Pub. L. 99-514, §2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 100-647, title I, §1010(h)(1), Nov. 10, 1988, 102 Stat. 3455, provided that:"(1) IN GENERAL.-A mutual life insurance company may elect to treat all individual noncancellable (or guaranteed renewable) accident and health insurance contracts as though they were cancellable for purposes of section 816 of subchapter L of chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]."(2) EFFECT OF ELECTION ON SUBSIDIARIES OF ELECTING PARENT.-For purposes of determining the amount of the small life insurance company deduction of any controlled group which includes a mutual company which made an election under paragraph (1), the taxable income of such electing company shall be taken into account under [former] section 806(b)(2) of the Internal Revenue Code of 1986 (relating to phaseout of small life insurance company deduction)."(3) ELECTION.-An election under paragraph (1) shall apply to the company's first taxable year beginning after December 31, 1983, and all taxable years thereafter. "(4) TIME AND MANNER.-An election under paragraph (1) shall be made-"(A) on the return of the taxpayer for its first taxable year beginning after December 31, 1983, and"(B) in such manner as the Secretary of the Treasury or his delegate may prescribe."[Pub. L. 100-647, title I, §1010(h)(2), (3), Nov. 10, 1988, 102 Stat. 3455, provided that:["(2) EFFECTIVE DATE.-The amendment made by this subsection [amending section 217(i) of Pub. L. 98-369, set out above] shall apply to taxable years beginning after December 31, 1986, and before January 1, 1992.["(3) REVENUE LOSS LIMITED.-The decrease in the amount of Federal revenue by reason of the amendment made by this subsection shall not exceed $300,000 per taxable year."]
- Commissioner
- The term "Commissioner" means the Commissioner of Internal Revenue.
- Internal Revenue Code of 1986
- The term "Internal Revenue Code of 1986" means this title, and the term "Internal Revenue Code of 1939" means the Internal Revenue Code enacted February 10, 1939, as amended.
- Secretary of the Treasury
- The term "Secretary of the Treasury" means the Secretary of the Treasury, personally, and shall not include any delegate of his.
- State
- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.