Page:United States Statutes at Large Volume 104 Part 2.djvu/855

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PUBLIC LAW 101-508—NOV. 5, 1990 104 STAT. 1388-447 net premiums for any taxable year shall be made in the manner required under section 811(a) for life insurance companies. "(3) TREATMENT OF CERTAIN POLICYHOLDER DIVIDENDS AND SIMI- LAR AMOUNTS. —Net premiums shall ba determined without regard to section 808(e) and without regard to other similar amounts treated as paid to, and returned by, the policyholder. "(4) SPECIAL RULES FOR REINSURANCE.— "(A) Premiums and other consideration incurred for reinsurance shall be taken into account under paragraph (I)(B) only to the extent such premiums and other consideration are includible in the gross income of an insurance company taxable under this subchapter or are subject to tax under this chapter by reason of subpart F of part III of subchapter N. "(B) The Secretary shall prescribe such regulations as may be necessary to ensure that premiums and other consideration with respect to reinsurance are treated consistently by the ceding company and the reinsurer. "(e) CLASSIFICATION OF CONTRACTS.— For purposes of this section— "(1) SPECIFIED INSURANCE CONTRACT.— "(A) IN GENERAL.—Except as otherwise provided in this paragraph, the term 'specified insurance contract' means any life insurance, Einnuity, or noncancellable accident and health insurance contract (or any combination thereof). " (B) EXCEPTIONS.— The term 'specified insurance contract' shall not include— "(i) any pension plan contract (as defined in section 818(a)), "(ii) any flight insurance or similar contract, and "(iii) any qualified foreign contract (as defined in section 807(e)(4) without regard to paragraph (5) of this subsection). "(2) GROUP LIFE INSURANCE CONTRACT. — The term 'group life insurance contract' means any life insurance contract— "(A) which covers a group of individuals defined by ref- erence to employment relationship, membership in an organization, or similar factor, (B) the premiums for which are determined on a group basis, and "(C) the proceeds of which are payable to (or for the benefit of) persons other than the employer of the insured, an organization to which the insured belongs, or other similar person. "(3) TREATMENT OF ANNUITY CONTRACTS COMBINED WITH NONCANCELLABLE ACCIDENT AND HEALTH INSURANCE.—Any annuity contract combined with noncancellable accident and health insurance shall be treated as a noncancellable accident and health insurance contract and not as an annuity contract. "(4) TREATMENT OF GUARANTEED RENEWABLE CONTRACTS. — The rules of section 816(e) shall apply for purposes of this section. "(5) TREATMENT OF REINSURANCE CONTRACT. —A contract which reinsures another contract shall be treated in the same manner as the reinsured contract. " (f) SPECIAL RULE WHERE NEGATIVE NET PREMIUMS.— "(1) IN GENERAL. —I f for any taxable year there is a n^ative capitalization amount with respect to any category of specified insurance contracts set forth in subsection (c)(D—