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#1
05-29-2008, 02:32 PM
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Tax Definition of a Life Insurance Company
Under IRS rules, deficiency reserves are not deductible. However, are these non-deductible reserves still counted as "life insurance reserves" in determining whether or not a company qualifies as a life insurance company for tax purposes?
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Carol Marler, FSA, MAAA, A Dedicated Actuary Just My Opinion (Although this statement is my opinion, and I am an actuary, it's still not a statement of actuarial opinion, and you really shouldn't rely on it.) Updated quotes June 10: Spoiler: 
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#2
05-29-2008, 02:52 PM
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No.
In order for a insurance company to be a life insurance company, (as oppposed to a non-life insurance company) more than 1/2 of its total reserves (which don't include def res because of 816(h)) must be life insurance reserves (which don't include def res because of 816(h)) plus unearned premiums and unpaid losses of guar ren and noncan health contracts. See US Tax Reserves For Life Insurers (Robbins & Bush) Chapter 3 and IRC sec 816.
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#3
05-29-2008, 02:58 PM
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I see. Exclude from both the numerator and denominator. Thanks.
__________________
Carol Marler, FSA, MAAA, A Dedicated Actuary Just My Opinion (Although this statement is my opinion, and I am an actuary, it's still not a statement of actuarial opinion, and you really shouldn't rely on it.) Updated quotes June 10: Spoiler:
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