NU Online News Service, Oct. 25, 2004, 3:44 p.m. EDT
The head of the American Council of Life Insurers, Washington, praised Congress and the White House for a new law that could benefit many life insurance companies.[@@]
Frank Keating, president and chief executive officer of the ACLI, says the recently enacted American Jobs Creation Act of 2004, H.R. 4520, includes 2 provisions benefiting life insurers. One suspends for 2 years a part of the tax code that affects stock companies only. The other gives statutory protection to a common form of deferred compensation.
The suspension of Section 815 of the tax code, which begins next January, removes a major tax burden on publicly held life companies, ACLI says. The section compelled them to keep a bookkeeping policyholder surplus account equal to half of the underwriting income received between 1959 and 1984. Taxes on these PSAs would be triggered upon certain necessary restructuring events or the dissolution of a company.