102 STAT. 3452
PUBLIC LAW 100-647—NOV. 10, 1988 "(D) TREATMENT OF COMPANIES WHICH BECOME TAXABLE UNDER SECTION 831 (a).— "(i) EXCEPTION TO PHASE-IN FOR COMPANIES WHICH WERE NOT TAXABLE, ETC., BEFORE 1987.—Subparagraph
(,C) of paragraph (4) shall not apply to any insurance company which, for each taxable year beginning before January 1, 1987, was not subject to the tax imposed by section 821(a) or 831(a) (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986) by reason of being— "(I) subject to tax under section 821(c) (as so in effect), or "(II) described in section 501(c) (as so in effect) and exempt from tax under section 501(a). "(ii) PHASE-IN BEGINNING AT LATER DATE FOR COMPANIES NOT 1ST TAXABLE UNDER SECTION 831 (a) IN 1987.—
In the case of an insurance company— "(I) which was not subject to the tax imposed by section 831(a) for its 1st taxable year beginning after December 31, 1986, by reason of being sulv ject to tax under section 831(b), or described in section 501(c) and exempt from tax under section 501(a), and "(II) which, for any taxable year beginning before January 1, 1987, was subject to the tax imposed by section 821(a) or 831(a) (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986), subparagraph (C) of paragraph (4) shall apply beginning with the 1st taxable year beginning after December 31, 1986, for which such company is subject to the tax imposed by section 831(a) and shall be applied by substituting the last day of the preceding taxable year for 'December 31, 1986' and the 1st day of the 7th succeeding taxable year for 'January 1, 1993'. "(E) TREATMENT OF CERTAIN RECIPROCAL INSURERS.—In
the case of a reciprocal (within the meaning of section 835(a)) which reports (as required by State law) on its annual statement reserves on unearned premiums net of premium acquisition expenses— "(i) subparagraph (B) of paragraph (4) shall be applied by treating unearned premiums as including an amount equal to such expenses, and "(ii) appropriate adjustments shall be made under subparagraph (c) of paragraph (4) to reflect the amount by which— "(I) such reserves at the close of the most recent taxable year beginning before January 1, 1987, are greater or less than, "(II) 80 percent of the sum of the amount under subclause (I) plus such premium acquisition expenses," (3) Paragraph (5) of section 832(e) of the 1986 Code is amended by striking out "and" at the end of subparagraph (A) and by striking out the period a t the end of subparagraph (B) and inserting in lieu thereof a comma. (d) AMENDMENTS RELATED TO SECTION 1022 OF THE REFORM ACT.—
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