PRIA, Government Policy, Made Personal

Summary

Counts as life insurance gross income three kinds of amounts. First, all premiums and similar payments on insurance and annuity contracts, after subtracting return premiums and amounts tied to indemnity reinsurance. Second, any net drops in certain reserves that must be taken into account under section 807(a). Third, any other amounts the tax rules say must be included in income. For premiums, the “gross” amount includes things like advance premiums, deposits, fees, assessments, payments for taking over liabilities on contracts the company didn’t issue, and policyholder dividends a reinsurer must repay. Policyholder dividends are not treated as return premiums, except when they are returned to another life insurer under indemnity reinsurance.

Title 26, §803

Internal Revenue Code, Source: USLM XML via OLRC

(a)In general

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

(1)Premiums

(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)Decreases in certain reserves

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

(3)Other amounts

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

(b)Special rules for premiums

(1)Certain items included

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,

on insurance and annuity contracts.

(2)Policyholder dividends excluded from return premiums

For purposes of subsection (a)(1)(B)—

(A)In general

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

(B)Exception for indemnity reinsurance

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