SUBPART F EXEMPTION FOR ACTIVE FINANCING.

SEC. 614. SUBPART F EXEMPTION FOR ACTIVE FINANCING. (a) In General.— (1) Section 953(e)( 10) is amended— (A) by striking “January 1, 2002” and inserting “January 1, 2007”, and (B) by striking “December 31, 2001” and inserting “December 31, 2006”. (2) Section 954(h)(9) is amended by striking “January 1, 2002” and inserting “January 1, 2007”. (b) Life Insurance and Annuity Contracts.— (1) In general.—Subparagraph (B) of section 954(i)(4) is amended to read as follows: (B) Life insurance and annuity contracts.— “(i) In general.—Except as provided in clause (ii), the amount of the reserve of a qualifying insurance company or qualifying insurance company branch for any life insurance or annuity contract shall be equal to the greater of— “(I) the net surrender value of such contract (as defined in section 807(e)(1)(A)), or “(II) the reserve determined under paragraph (5).116 STAT. 62 “(ii) Ruling request, etc.—The amount of the reserve under clause (i) shall be the foreign statement reserve for the contract (less any catastrophe, deficiency, equalization, or similar reserves), if, pursuant to a ruling request submitted by the taxpayer or as provided in published guidance, the Secretary determines that the factors taken into account in determining the foreign statement reserve provide an appropriate means of measuring income.”. (c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2001.