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PUBLIC LAW 87-834-OCT. 16, 1962
[76 STAT.
"(c) ADDITIONS TO ACCOUNT.—There shall be added to the protection against loss account for each taxable year an amount equal to the amount allowable as a deduction for the taxable year under subsection (a)(1). "(d)
Poat. p. 997.
SUBTRACTIONS.— "(1) ANNUAL SUBTOACTIONS.—After
applying subsection (c), there shall be subtracted for the taxable year from the protection against loss account— "(AJ first, an amount equal to the excess (if any) of the deduction allowed under subsection (a) for the taxable year over the underwriting gain (within the meaning of subsection (a)(1)) for the taxable year, " (B) then, the amount (if any) by which— " (i) the sum of the investment loss for such year and the statutory underwriting loss (reduced by the amount referred to m subparagraph (A)) for such year, exceeds " (ii) the sum of the statutory underwriting income for such taxable year and the taxable investment income for such taxable year, " (C) next (in the order in which the losses occurred), amounts equal to the unused loss carryovers to such year, " (D) next, any amount remaining which was added to the account for the fifth preceding taxable year, minus one-half of the amount remaining in the account for such taxable year which was added by reason of subsection (a)(1)(B), and " (E) finally, the amount by which the total amount ii]kthe account exceeds whichever of the following is the greater: " (i) 10 percent of premiums earned on insurance contracts during the taxable year (as defuied in section 832 (b)(4)) less dividends to policyholders (as defined in section 832(c) (11)), or "(ii) the total amount in the account at the close of the preceding taxable year. " (2) RULES FOR CEILING ON PROTECTION AGAINST LOSS ACCOUNT.—
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For purposes of paragraph (1)(E), the total amount in the account shall be determined— " (A) after the application of this section without regard to paragraph (1)(E), and " (B) without taking into consideration amounts remaining in the account which were added, with respect to all taxable years, by reason of subsection (a)(1)(C). "(3) PRIORITIES.—The amounts required to be subtracted from the protection against loss account— " (A) under subparagraphs (A), (B), and (C) of paragraph (1) shall be subtracted— " (i) first (on a first-in, first-out, basis) from amounts in the account with respect to the five preceding taxable years and the taxable year, and "(ii) then from amounts in the account with respect to earlier years, " (B) under subparagraph (E) of paragraph (1) shall be subtracted only from amounts in the account with respect to tliQ taxable year, and " (C) under paragraphs (A), ^B), (C), and (E) of paragraph (1) shall, if the amount to be subtracted from the total amounts in the account with respect to any taxable year is less than such total, be subtracted from each of the amounts (referred to in subsection (a)(1)) in the account with respect to such year in the proportion which each bears to such total.
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