Description: Three tax-related articles of interest to those associated with smaller insurance companies.

Description: This is a discussion paper in response to Raymond L. Whaley's work entitled, 'The Taxation of Insurance in Canada.'

Description: This is a discussion about 1959 Act dealing with federal income tax on life insurance companies. Specific topics include: A. Impact the new tax law has had on: i the investment policies of individual companies, ii company accounting systems and procedures, iii actuarial bases for new contracts? B. What principles have been followed in allocating the federal income tax among the annual statement lines of business? How is the assessment to a line of business with a loss from operations established? Is the tax on the interest on surplus allocated on some general basis or with regard to the relative contributions of the different lines to the accumulated surplus? C. How is the tax taken into account in asset share tests and dividend scale determinations?

Description: The paper sets forth a procedure, based on actual experience, for determining extra life insurance reserves for term insurance conversion rights for annual statement purposes. Followed by several submitted discussion papers.

Description: This discussion looked at defining tax parity between mutual companies and stock companies as well as the consequences of failure to achieve tax parity.

Description: Discusses the importance of making tax-motivated investment decisions regarding one portfolio of a company within the context of the overall tax return of which the portfolio is a part, not necessarily on the tax effect of the portfolio alone.

Description: Insurance companies will be required to file the Internal Revenue Service IRS Schedule M-3 for tax years ending on or after Dec. 31, 2006. Schedule M-3 was designed by the IRS as a replacement for the Schedule M-1, which is used to reconcile a corporation's financial accounting income or loss with its taxable income or loss.

Description: This article discusses the Section 338h10 election on the disposition of an insurance company.

Description: The Internal Revenue Service “the Service” or “IRS” recently released Technical Advice Memorandum 200939019 “the TAM”. The TAM initially caused a stir among some in the insurance tax industry because it disallows a tax deduction that was permitted on the NAIC Annual Statement hereinafter “NAIC statement”. Specifically, the TAM states that unpaid loss adjustment expenses “LAE” for retiree medical benefits may only be deducted in the tax year in which the benefits are included in income by the employee who earned the benefits, despite the fact the amounts were properly included on the NAIC statement and regardless of deductibility of the unpaid LAE under the Internal Revenue Code “the Code”. This article discusses the memorandum.

Description: The Taxing Times editor discusses what is in the current issue as well as Obama adminstration tax proposals affecting the insurance industry such as notification requirements and COLI. Also mentioned are IRS expected guidance on deficiency reservs and 7702 defining cash surrender value.