Description: The Revenue Act of 1987 amended section 807d2B of the Internal Revenue Code. It established the interest rate used in the calculation of tax reserves to be the greater of the applicable federal interest rate or the prevailing maximum statutory valuation rate for the contract’s calendar year of issue. The amendment is effective for contracts issued in tax years beginning after December 31, 1987. This document shows all the applicable federal interest rates from 1998 - 2009.

Description: This article discusses the the 1998 alternartive XXX model regulations and the potential tax impact on the definition of life insurance and on reserve deductions associated therewith.

Description: This article describes the effect of different valuation interest rates and levels of surplus on income tax paid by life insurance companies via Phase 1 of the Federal Income Tax Act of 1959.

Description: Section 818c of the Life Insurance Company Income Tax Act of 1959 provides, for companies holding other than net level premium reserves, a choice of two methods: exact revaluation or approximate revaluation to this basis. This paper discusses the impact of the choice on the level of a company's tax reserves. A discussion paper follows.

Description: Federal Tax Issues Under the 2001 CSO Mortality Tables

Description: Actuary/accountant/tax attorney dialogue on recent guidance issued regarding treatment of deficiency reserves with respect to the “statutory reserves cap” of Internal Revenue Code section 807(d)(1).

Description: T3: TAXING TIMES TIDBITS

Description: Section 807d of the IRC provides that the deductible reserve for a life insurance contract is the greater of net surrender value or the Federally Prescribed Reserve FPR calculated under prescribed interest rate and mortality assumptions, but in no event can the tax reserve exceed “aggregate statutory reserves” i.e., the statutory cap. This article logically concludes that deficiency reserves are included in the calculation of the statutory cap.

Description: This article discusses XXX reserve financing, one of the most common life insurance industry capital markets funding transactions.

Description: Recently, the IRS eliminated one of the more amorphous tax rules that at times was a stumbling block in Triple-X securitization transactions. Unfortunately, however, the IRS left an equally amorphous consolidated return rule untouched.