PUBLIC LAW 99-514—OCT. 22, 1986
100 STAT. 2839
"(B) EXCHANGES OF SUBSTANTIALLY SIMILAR POLICIES.—For
purposes of subparagraph (A), any policy issued after December 31, 1983, in exchange for a substantially similar policy issued on or before such date shall be treated as issued before January 1, 1984. A similar rule shall apply in the case of a series of exchanges. "(8) SUBSECTION TO APPLY TO POLICIES PROVIDED UNDER EMPLOYEE BENEFIT PLANS.—This subsection shall not apply to any
policyholder dividend paid or accrued with respect to a group policy issued in connection with a plan to provide welfare benefits to employees (within the meaning of section 419(e)(2))." (d) CLARIFICATION OF EQUITY BASE.—Paragraph (2) of section
809(b) (defining equity base) is amended by adding at the end thereof the following new sentence: "No item shall be taken into account more than once in determining equity base." (e) DEFINITION OF 50 LARGEST STOCK COMPANIES.—
(1) IN GENERAL.—Subparagraph (C) of section 809(d)(4) (defining 50 largest stock companies) is amended by striking out the last sentence and inserting in lieu thereof the following: "the Secretary— "(i) shall, for purposes of determining the base period stock earnings rate, exclude from the group determined under the preceding sentence any company which had a negative equity base at any time during 1981, 1982, or 1983, "(ii) shall exclude from such group for any calendar year any company which has a negative equity base, and "(iii) may by regulations exclude any other company which otherwise would have been included in such group if the inclusion of the excluded company or companies would, by reason of the small equity base of such company, seriously distort the stock earnings rate. The aggregate number of companies excluded by the Secretary under clause (iii) shall not exceed the excess of 2 over the number of companies excluded under clause (ii)." (2) ONLY DOMESTIC COMPANIES TAKEN INTO ACCOUNT.—Section
809 is amended— (A) by striking out "largest stock life insurance companies" in subsection (d)(4)(C) and inserting in lieu thereof "largest domestic stock life insurance companies", and (B) by striking out "mutual life insurance companies" in subsection (e)(1) and inserting in lieu thereof "domestic mutual life insurance companies". (f) CLARIFICATION OF STATEMENT GAIN OR LOSS FROM OPER-
ATIONS.—Paragraph (1) of section 809(g) (defining statement gain or loss from operations) is amended by striking out so much of such paragraph as precedes subparagraph (B) and inserting in lieu thereof the following: "(1) STATEMENT GAIN OR LOSS FROM OPERATIONS.—The term 'statement gain or loss from operations' means the net gain or loss from operations required to be set forth in the annual statement, determined without regard to Federal income taxes, and— "(A) determined by substituting for the amount shown for policyholder dividends the amount of deduction for policy-
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