§803 — Title 26 Internal Revenue Code | U.S. Code

Summary

For taxing life insurance companies, "life insurance gross income" adds up three things: premiums and other payments received on insurance and annuity contracts (minus return premiums and amounts tied to indemnity reinsurance), each net drop in reserves that section 807(a) requires to be counted, and any other amounts that are taxable income under the tax code. Gross premiums include advance premiums, deposits, fees, assessments, payments for taking over another company's contract liabilities, and policyholder dividends a reinsurer owes back to the company. Dividends paid to policyholders do not count as return premiums, except amounts returned to another life insurance company under indemnity reinsurance.

Title 26, §803

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of this part, the term “life insurance gross income” means the sum of the following amounts:

(1)(A)The gross amount of premiums and other consideration on insurance and annuity contracts, less

(B)return premiums, and premiums and other consideration arising out of indemnity reinsurance.

(2)Each net decrease in reserves which is required by section 807(a) to be taken into account under this paragraph.

(3)All amounts not includible under paragraph (1) or (2) which under this subtitle are includible in gross income.

(b)(1)For purposes of subsection (a)(1)(A), the term “gross amount of premiums and other consideration” includes—

(A)advance premiums,

(B)deposits,

(C)fees,

(D)assessments,

(E)consideration in respect of assuming liabilities under contracts not issued by the taxpayer, and

(F)the amount of policyholder dividends reimbursable to the taxpayer by a reinsurer in respect of reinsured policies,

(2)For purposes of subsection (a)(1)(B)—

(A)Except as provided in subparagraph (B), the term “return premiums” does not include any policyholder dividends.

(B)Subparagraph (A) shall not apply to amounts of premiums or other consideration returned to another life insurance company in respect of indemnity reinsurance.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 803, acts Aug. 16, 1954, ch. 736, 68A Stat. 256; Mar. 13, 1956, ch. 83, § 2, 70 Stat. 39, related to income and deductions in the case of life insurance companies, prior to the general revision of this part by Pub. L. 86–69, § 2(a), June 25, 1959, 73 Stat. 112.

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable to taxable years beginning after Dec. 31, 1983, see section 215 of Pub. L. 98–369, set out as a note under section 801 of this title.

§803 Life Insurance Gross Income