PUBLIC LAW 101-508—NOV. 5, 1990 104 STAT. 1388-449 "(j) TRANSITIONAL RULE. — In the case of any taxable year which includes September 30, 1990, the amount taken into account as the net premiums (or negative capitalization amount) with respect to any category of specified insurance contracts shall be the amount which bears the same ratio to the amount which (but for this subsection) would be so taken into account as the number of days in such taxable year on or after September 30, 1990, bears to the total number of days in such taxable year." Qo) REPEAL OF SPECIAL TREATMENT OF ACQUISITION EXPENSES UNDER MINIMUM TAX.— Paragraph (4) of section 56(g) is amended by striking subparagraph (F) and redesignating subparagraphs (G) and (H) as subparagraphs (F) and (G), respectively. (c) CLERICAL AMENDMENT.—The table of sections for part III of subchapter L of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 848. Capitalization of certain policy acquisition expenses." (d) EFFECTIVE DATE.— (1) IN GENERAL.—The amendments made by subsections (a) 26 USC 848 note. and (c) shall apply to taxable years ending on or after September 30, 1990. Any capitalization required by reason of such amendments shall not be treated as a change in method of accounting for purposes of the Internal Revenue Code of 1986. (2) SUBSECTION (b). — 26 USC 56 note. (A) IN GENERAL.— The amendment made by subsection (b) shall apply to taxable years beginning on or after September 30, 1990, except that, in the case of a small insurance company, such amendment shall apply to taxable years beginning after December 31, 1989. For purposes of this paragraph, the term "small insurance company" means any insurance company which meets the requirements of section 806(a)(3) of the Internal Revenue Code of 1986; except that paragraph (2) of section 806(c) of such Code shall not apply. (B) SPECIAL RULES FOR YEAR WHICH INCLUDES SEPTEMBER 30, 1990.— In the case of any taxable year which includes September 30, 1990, the amount of acquisition expenses which is required to be capitalized under section 56(g)(4)(F) of the Internal Revenue Code of 1986 (as in effect before the amendment made by subsection (b)) by a company which is not a small insurance company shall be the amount which bears the same ratio to the amount which (but for this subparagraph) would be so required to be capitalized as the number of days in such taxable year before September 30, 1990, bears to the total number of days in such taxable year. A similar reduction shall be made in the amount amortized for such taxable year under such section 56(g)(4)(F). SEC. 11302. TREATMENT OF CERTAIN NONLIFE RESERVES OF LIFE INSUR- ANCE COMPANIES. (a) GENERAL RULE.— Subsection (e) of section 807 (relating to special rules for computing reserves) is amended by adding at the end thereof the following new paragraph: "(7) SPECIAL RULES FOR TREATMENT OF CERTAIN NONLIFE RESERVES.—
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