Description: Internal Revenue Code (I.R.C.) §§243–2461 provide that a corporation is allowed a percentage deduction for dividends received from other corporations (the DRD). In addition to the general corporate rules regarding the DRD, if the recipient of a corporate dividend is a life insurance company, I.R.C. §812(a) further allocates the benefit of the DRD between the company’s share and the policyholders’ share. This allocation methodology is often referred to as proration. Proration has historically involved a complex and at times contentious2 formulaic process.

Description: A summary and analysis of REG-103163-18, the proposed regulations providing guidance for property-casualty loss reserve discounting (LRD) under IRC Section 846.

Description: This article presents a high-level overview of the Federal Income tax rules in section 382 regarding limitations on the use of losses after an ownership change takes place and summarizes problems and issues for the insurance industry in proposed regulations under section 382 as summarized in comments made by the industry and the ACLI

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: 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: Discusses the meaning of statutory reserves with respect to a pending IRS ruling, in the case where different levels of statutory reserves are required in different states.

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: This article details proposed regulations issued by the IRS that clarify that a single series may be treated as an entity separate from a series organization for federal income tax purposes, even if it is not recognized as a separate entity under local law.