EXCEPTION TO TRANSFER FOR VALUABLE CONSIDERATION RULES.

SEC. 13522. EXCEPTION TO TRANSFER FOR VALUABLE CONSIDERATION RULES.(a) In General.—Subsection (a) of section 101 is amended by inserting after paragraph (2) the following new paragraph:“(3) Exception to valuable consideration rules for commercial transfers.—“(A) In general.—The second sentence of paragraph (2) shall not apply in the case of a transfer of a life insurance contract, or any interest therein, which is a reportable policy sale.“(B) Reportable policy sale.—For purposes of this paragraph, the term ‘reportable policy sale’ means the acquisition of an interest in a life insurance contract, directly or indirectly, if the acquirer has no substantial family, business, or financial relationship with the insured apart from the acquirer’s interest in such life insurance contract. For purposes of the preceding sentence, the term ‘indirectly’ applies to the acquisition of an interest in a 131 STAT. 2152 partnership, trust, or other entity that holds an interest in the life insurance contract.”.(b) Conforming Amendment.—Paragraph (1) of section 101(a) is amended by striking “paragraph (2)” and inserting “paragraphs (2) and (3)”.(c) Effective Date.—The amendments made by this section shall apply to transfers after December 31, 2017.