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“unpaid losses” for purposes of section 816(c)(2). In Occidental
Life Ins. Co., the Court of Appeals for the Ninth Circuit was
asked to decide whether the use of the term “unpaid losses” in
former section 806(c) included accrued unpaid losses. The Court
of Appeals for the Ninth Circuit held it did. The parties in
that case had stipulated that the term had the same meaning in
former sections 801 and 806(c), and the court construed section
816's predecessor (former section 801) merely as support for its
ultimate conclusion. See Occidental Life Ins. Co. v. United
States, supra at 5. The court stated that the term “unpaid
losses” in former section 801 included accrued unpaid losses.6
See id. at 6. The court reasoned that most unaccrued unpaid
losses fall within the meaning of “life insurance reserves” for
purposes of former section 801(a)(1), (b), and (c)(1), and that
the reference to “unpaid losses” in former section 801(a)(2) and
(c)(2) would be meaningless were the term not to include both
accrued and unaccrued unpaid losses. Id.
The Court of Appeals for the Seventh Circuit noted that this
rationale of the Court of Appeals for the Ninth Circuit was based
6 In this regard, the Court of Appeals for the Ninth
Circuit's analysis of the subject term under former sec. 801 was
dicta. The court acknowledged as much when it stated that “an
examination of section 801 along these comparative lines is not
required for a conclusion as to the meaning of 'unpaid losses' in
section 806". Occidental Life Ins. Co. v. United States, 385
F.2d 1, 5 (9th Cir. 1967).
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