Central Reserve Life Corporation and Subsidiaries - Page 1

















                                   113 T.C. No. 19                                    


                               UNITED STATES TAX COURT                                


          CENTRAL RESERVE LIFE CORPORATION AND SUBSIDIARIES, Petitioner v.            
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 21390-96.              Filed October 12, 1999.              


                    P's subsidiary, L, writes cancelable accident and                 
               health (CA&H) insurance.  R argues that L is not a                     
               “life insurance company" under sec. 816(a), I.R.C.,                    
               because L's accrued unpaid losses on CA&H insurance are                
               “unpaid losses" for purposes of ascertaining its “total                
               reserves" under sec. 816(c), I.R.C.  P argues that L is                
               a life insurance company under sec. 816(a), I.R.C.,                    
               because the term “unpaid losses", as used in sec.                      
               816(c), I.R.C., does not include accrued unpaid losses                 
               on CA&H insurance.                                                     
                    Held: L is a life insurance company under sec.                    
               816(a), I.R.C.; its accrued unpaid losses on CA&H                      
               insurance are not “unpaid losses” for purposes of sec.                 
               816(c), I.R.C.                                                         









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