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We conclude that, for the years in issue, because its
accrued unpaid losses on CA&H insurance policies are not to be
included in total reserves under section 816(c)(2), Best Life
qualifies as a life insurance company under section 816(a) and is
to be allowed the claimed section 806 deductions. This reading
of section 816 conforms with the recent opinion of the Tax Court
and with the opinion of the Court of Appeals for the Seventh
Circuit that are directly on point and comports with the
insurance industry’s historical treatment of unpaid losses and
reserves.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011