TREATMENT OF MUTUAL LIFE INSURANCE COMPANY POLICY-HOLDER DIVIDENDS FOR PURPOSES OF BOOK PREFERENCE.

SEC. 10243. TREATMENT OF MUTUAL LIFE INSURANCE COMPANY POLICY-HOLDER DIVIDENDS FOR PURPOSES OF BOOK PREFERENCE. (a) General Rule.— Paragraph (2) of section 56(f) (defining adjusted net book income) is amended by redesignating subparagraph (H) as subparagraph (I) and by inserting after subparagraph (G) the following new subparagraph: “(H) Special rules for life insurance companies.— “(i) Policyholder dividends of mutual companies.— In determining the adjusted net book income of any mutual life insurance company, a reduction shall be allowed for policyholder dividends with respect to any taxable year only to the extent such dividends exceed the differential earnings amount determined for such taxable year under section 809. “(ii) Other adjustments.— To the extent provided by the Secretary, such additional adjustments shall be made as may be necessary to make the calculation of adjusted net book income in the case of any life insur-101 STAT. 1330–424ance company consistent with the calculation of adjusted net book income generally.” (b) Effective Date.— The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1987.