Description: Discusses the problem with the computation of tax reserves for VA contracts with Guaranteed Living Benefit riders that were issued prior to December 31, 2009.

Description: This article discusses tax and accounting issues that arise under a recently-issued Chief Counsel Advice in which the IRS applied a life insurance company tax rule to a nonlife company that issues life insurance products

Description: This article discusses a new procedure for correcting inadvertent failures to satisfy the diversification requirements applicable to variable annuity and life insurance contracts under section 817h of the Internal Revenue Code.

Description: Discussion of the March 1, 2013 Internal Revenue Service (“IRS”) release of PLR 201309011, which addresses the application of the section 817(h) diversification requirements to variable contracts that have invested in illiquid investment vehicles (the “Funds”).

Description: The article summarizes PLRs 201515001 and 201519001, in which the IRS addressed the treatment of a non-qualified deferred annuity contract under the investor control doctrine and other applicable rules. The contract provides a guaranteed lifetime withdrawal benefit and investment options that correspond to “public” mutual funds. The IRS concluded that the investor control doctrine will apply to treat the contract purchaser as the owner of the mutual fund shares for federal income tax purposes. The IRS also addressed certain other tax aspects of the arrangement. The effect of the rulings is that the contract will be taxed similarly to a contingent deferred annuity (where the policyholder holds the mutual fund shares in his or her own brokerage account), while being structured like a traditional deferred variable annuity (where the insurance company holds the shares in its separate account).

Description: The article summarizes several recent private letter rulings from the IRS addressing the "investor control" doctrine in the context of funds of funds.

Description: The article summarizes and comments on a recent IRS Chief Counsel Advice that addressed how the proration formula works for purposes of the separate account dividends received deduction in the context of a partnership structure. The article explains the historical background of the proration formula as it appeared in the 1959 Act and the differences between how the applies and affects the dividends received deduction in the partnership structure versus the more tradition RIC structure.