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contracts (either separately or combined with accident
and health insurance), or noncancellable contracts of
health and accident insurance, if–-
(1) its life insurance reserves * * *, plus
(2) unearned premiums, and unpaid losses
(whether or not ascertained), on noncancellable
life, accident, or health policies not included in
life insurance reserves,
comprise more than 50 percent of its total reserves (as
defined in subsection (c)). * * *
* * * * * * *
(c) Total Reserves Defined.–-For purposes of
subsection (a), the term “total reserves” means–-
(1) life insurance reserves,
(2) unearned premiums, and unpaid losses
(whether or not ascertained), not included in life
insurance reserves, and
(3) all other insurance reserves required by
law.
The equation below summarizes the statutory elements of
the section 816(a) life insurance company qualifying fraction:
Numerator Denominator Ratio
Life insurance reserves + Life insurance reserves + Percentage
Unpaid losses on noncancelable life, � Unpaid losses + = of life
health, and accident claims All other reserves insurance reserves
In their computations of total life insurance company
reserves, the parties agree that the only dispute herein involves
whether the term “unpaid losses” in the denominator of the life
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Last modified: May 25, 2011