A bill to amend the Internal Revenue Code of 1986 to clarify the exemption from tax for small property and casualty insurance companies.

Amends Internal Revenue Code provisions concerning tax-exempt insurance companies (other than life insurance companies) to increase from $350,000 to $551,000 (adjusted annually for inflation) the maximum amount of premiums that may be written annually by such a company in order to remain tax-exempt. Raises the maximum amount of premiums that may be written annually by an insurance company (other than a life insurance company) to qualify for an alternative tax for small companies.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2084 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2084

  To amend the Internal Revenue Code of 1986 to clarify the exemption 
     from tax for small property and casualty insurance companies.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 10, 2002

   Mr. Bond introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to clarify the exemption 
     from tax for small property and casualty insurance companies.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CLARIFICATION OF EXEMPTION FROM TAX FOR SMALL PROPERTY AND 
              CASUALTY INSURANCE COMPANIES.

    (a) Premium Limitations Increased To Reflect Inflation Since First 
Imposed.--
            (1)(A) Subparagraph (A) of section 501(c)(15) of the 
        Internal Revenue Code of 1986 is amended by striking 
        ``$350,000'' and inserting ``$551,000''.
            (B) Paragraph (15) of section 501(c) of such Code is 
        amended by adding at the end the following new subparagraph:
                    ``(E) In the case of any taxable year beginning in 
                a calendar year after 2001, the $551,000 amount set 
                forth in subparagraph (A) shall be increased by an 
                amount equal to--
                            ``(i) $551,000, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for such 
                        calendar year by substituting `calendar year 
                        2000' for `calendar year 1992' in subparagraph 
                        (B) thereof.
                If the amount as adjusted under the preceding sentence 
                is not a multiple of $1,000, such amount shall be 
                rounded to the next lowest multiple of $1,000.''
            (2)(A) Clause (i) of section 831(b)(2)(A) of such Code is 
        amended to read as follows:
                            ``(i) the net written premiums (or, if 
                        greater, direct written premiums) for the 
                        taxable year exceed the amount applicable under 
                        section 501(c)(15)(A) but do not exceed 
                        $1,890,000, and''.
            (B) Paragraph (2) of section 831(b) of such Code is amended 
        by adding at the end the following new subparagraph:
                    ``(C) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2001, 
                the $1,890,000 amount set forth in subparagraph (A) 
                shall be increased by an amount equal to--
                            ``(i) $1,890,000, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for such 
                        calendar year by substituting `calendar year 
                        2000' for `calendar year 1992' in subparagraph 
                        (B) thereof.
                If the amount as adjusted under the preceding sentence 
                is not a multiple of $1,000, such amount shall be 
                rounded to the next lowest multiple of $1,000.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.
                                 <all>