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which is the mean of the total insurance liabilities of the same
domestic insurance companies. Sec. 842(b)(2)(C).6 The domestic
yield is a ratio, the numerator of which is the total net
investment income of domestic life insurance companies and the
denominator of which is the mean annual balance of the total
assets of these same domestic companies. Sec. 842(b)(3).7
Section 842(b)(2)(C) and (b)(3) direct the Secretary of the
Treasury to calculate both the asset/liability percentage and the
6Sec. 842(b)(2)(C) provides in pertinent part:
(C) Domestic asset/liability percentage.--The
domestic asset/liability percentage applicable for
purposes of subparagraph (A)(ii) to any foreign company
for any taxable year is a percentage determined by the
Secretary on the basis of a ratio--
(i) the numerator of which is the mean of the
assets of domestic insurance companies taxable
under the same part of this subchapter as such
foreign company, and
(ii) the denominator of which is the mean of the
total insurance liabilities of the same companies.
7Sec. 842(b)(3) provides:
(3) Domestic investment yield.--The domestic
investment yield applicable for purposes of paragraph
(1)(B) to any foreign company for any taxable year is
the percentage determined by the Secretary on the basis
of a ratio--
(A) the numerator of which is the net
investment income of domestic insurance companies
taxable under the same part of this subchapter as
such foreign company, and
(B) the denominator of which is the mean of
the assets of the same companies.
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