CH. 1
NORMAL TAXES AND SURTAXES
259
(2) If the quotient obtained in paragraph (1) is 1.05 or more, the reserve interest credit shall be zero. (3) If the quotient obtained in paragraph (1) is 1.00 or less, the reserve interest credit shall be an amount equal to 50 percent of the taxable income. (4) If the quotient obtained in paragraph (1) is more than 1.00 but less than 1.05, the reserve interest credit shall be the amount obtained by multiplying the taxable income by 10 times the difference between the figures 1.05 and such quotient. (c) ADJUSTED TAXABLE INCOME.—For purposes of subsection (b) (1), the term "adjusted taxable income" means the taxable income (computed without the deductions provided in section 803(g)(1) or (5)) minus 50 percent of the amount of the adjustment for certain reserves provided in section 806. (d) R E Q U I R E D INTEREST.—For purposes of subsection (b)(1), the term "required interest" means the total of— (1) the sum of the amounts obtained by multiplying— (A) each rate of interest assumed in computing the taxpayer's life insurance reserves by (B) the means of the amounts of the taxpayer's adjusted reserves computed at that rate at the beginning and end of the taxable year, (2) 2 percent of the reserve for deferred dividends, and (3) interest paid.
SEC. 806. ADJUSTMENT FOR CERTAIN RESERVES. In the case of a life insurance company writing contracts other than life insurance or annuity contracts (either separately or combined with noncancellable health and accident insurance), the term "adjustment for certain reserves" means an amount equal to Sji percent of the unearned premiums and unpaid losses on such other contracts which are not included in life insurance reserves (as defined in section 803(b). For purposes of this section, such unearned premiums shall not be considered to be less than 25 percent of the net premiums written during the taxable year on such other contracts. SEC. 807. FOREIGN LIFE INSURANCE COMPANIES. (a) CARRYING ON UNITED STATES INSURANCE
BUSINESS.—A
foreign life insurance company carrying on a life insurance business within the United States, if with respect to its United States business it would qualify as a life insurance company under section 801, shall be taxable in the same manner as a domestic life insurance company; except that the determinations necessary for purposes of this subtitle shall be made on the basis of the income, disbursements, assets, and liabilities reported in the annual statement for the taxable year of the United States business of such company on the form approved for life insurance companies by the National Association of Insurance Commissioners. (b) N o UNITED STATES INSURANCE BUSINESS.—Foreign life insurance companies not carrying on an insurance business within the United States shall not be taxable under this section but shall be taxable as other foreign corporations.
§ 807(b)
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