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PUBLIC LAW 86-69-JUNE 25, 1959
[73 S T A T.
" (g) VARIABLE A N N U I T I E S. —
" ( I J IN GENERAL.—FoT puTDOses of this part, an annuity Contract includes a contract which provides for the payment of a variable annuity computed on the basis of recognized mortality tables and the investment experience of the company issuing the contract. "(2) ADJUSTED RESERVES RATE; ASSUMED RATE.—For purposes of
this part— " (A) the adjusted reserves rate for any taxable year with respect to annuity contracts described in paragraph (1), and ' ' (B) the rate of interest assumed by the taxpayer for any taxable year in calculating the reserve on any such contract, shall be a rate equal to the current earnings rate determined under paragraph (3). "(3) CURRENT EARNINGS RATE.—For purposes of this part, the current earnings rate for any taxable j^ear with respect to annuity contracts described in paragraph (1) is the current earnings rate determined under section 805(b)(2) with respect to such contracts, reduced by the percentage obtained by dividing— " (A) the amount of the actuarial margin charge on all annuity contracts described in paragraph (1) issued by the taxpaver, by " (B) the mean of the reserves for such contracts. "(4) INCREASES AND DECREASES I N RESERVES.—For purposes of subsections (a) and (b) of section 810, the sum of the items described in section 810(c) taken into account as of the close of the taxable year shall, under regulations prescribed by the Secretary or his delegate, be adjusted— " (A) by subtracting therefrom an amount equal to the sum of the amounts added from time to time (for the taxable year) to the reserves for annuity contracts described in paragraph (1) by reason of appreciation in value of assets (whether or not the assets have been disposed of), and " (B) by adding thereto an amount equal to the sum of the amounts subtracted from time to time (for the taxable year) from such reserves by reason of depreciation in value of assets (whether or not the assets have been disposed of). " (5) COMPANIES ISSUING VARIABLE ANNUITIES AND OTHER CON-
TRACTS.—In the case of a life insurance company which issues both annuity contracts described in paragraph (1) and other contracts, under regulations prescribed by the Secretary or his delegate— " (A) the policy and other contract liability requirements shall be considered to be the sum of— " (i) the policy and other contract liability requirements computed by reference to the items which relate to annuity contracts described in paragraph (1), and "(ii) the policy and other contract liability requirements computed by excluding the items taken into account under clause (i); and " (B) such additional separate computations, with respect to such annuity contracts and such other contracts, shall be made as may be necessary to carry out the purposes of this subsection and this part. " (6) TERMINATION.—Paragraphs (1), (2), (3), (4), and (5)
shall not apply with respect to any taxable year beginning after December 31, 1962.
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