TREATMENT OF CERTAIN INSURANCE CONTRACTS ON RETIRED LIVES.

SEC. 1611. TREATMENT OF CERTAIN INSURANCE CONTRACTS ON RETIRED LIVES. (a) General Rule.— (1) Paragraph (2) of section 817(d) (defining variable contract) is amended by striking “or” at the end of subparagraph (A), by striking “and” at the end of subparagraph (B) and110 STAT. 1846 inserting “or”, and by inserting after subparagraph (B) the following new subparagraph: “(C) provides for funding of insurance on retired lives as described in section 807(c)(6), and”. (2) Paragraph (3) of section 817(d) is amended by striking “or” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “, or”, and by inserting after subparagraph (B) the following new subparagraph: “(C) in the case of funds held under a contract described in paragraph (2)(C), the amounts paid in, or the amounts paid out, reflect the investment return and the market value of the segregated asset account.”. (b) Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 1995.