73 S T A T. ]
PUBLIC LAW 86-69-JUNE 25, 1959
" (B) in the case of policies issued by an organization which meets the requirements of section 501(c)(9) other than the requirement of subparagraph (B) thereof, and " (C) as provided in paragraph (3), in addition to the requirements set forth in paragraph (1), life insurance reserves must be required by law. "(3) ASSESSMENT COMPANIES.—In the case of an assessment life insurance company or association, the term 'life insurance reserves' includes— " (A) sums actually deposited by such company or association with State or Territorial officers pursuant to law as guaranty or reserve funds, and " (B) any funds maintained, under the charter or articles of incorporation or association (or bylaws approved by a State insurance commissioner) of such company or association, exclusively for the payment of claims arising under certificates of membership or policies issued on the assessment plan and not subject to any other use. For purposes of this part, the rate of interest assumed in calculating the reserves described in subparagraphs (A) and (B) shall be 3 percent. "(4) DEFICIENCY RESERVES EXCLUDED.—The term 'life insurance reserves' does not include deficiency reserves. For purposes of this subsection and subsection (c), the deficiency reserve for any contract is that portion of the reserve for such contract equal to the amount (if any) by which— " (A) the present value of the future net premiums required for such contract, exceeds " (B) the present value of the future actual premiums and consideration charged for such contract. '"(5) AMOUNT or RESERVES.—For purposes of this subsection, subsection (a), and subsection (c), the amount of any reserve (or portion thereof) for any taxable year shall ba the mean of such reserve (or portion thereof) at the beginning and end of the taxable year. "(c) TOTAL RESERVES DEFINED.—For purposes of subsection (a), the term 'total reserves' means— "(1) life insurance reserves, "(2) unearned premiums, and unpaid losses (whether or not ascertained), not included in life insurance reserves, and " (3) all other insurance reserves required by law. The term 'total reserves' does not include deficiency reserves (within the meaning of subsection (b)(4)). "(d)
ADJUSTMENTS IN RESERVES FOR POLICY LOANS.—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. "(e) GUARANTEED RENEWABLE CONTRACTS.—For purposes of this part, guaranteed renewable life, health, and accident insurance shall be treated in the same manner as noncancellable life, health, and accident insurance. "(f)
BURIAL AND FUNERAL BENEFIT INSURANCE COMPANIES.—^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 821 or section 831.
113 26 USC fiOl.
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