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74TH CONGRESS . SESS . II. CH. 690 . JUNE 22, 1936 . pany (other than a life or mutual insurance company) a tax of 15 pe r centum of the amou nt thereof . Foreign companies. (2) NORMAL-TAX NET INCOME OF FOREIGN COMPANIES .-In the case of a foreign insurance company (other than a life or mutual insurance company), the normal-tax net income shall be the net Ded ucti ons .
income from sources within the United States minus the sum of- (A) Interest on Obligations of the United States and Its Ante, p.1664 .
Instrumentalities.-The credit provided in section 26 (a) . (B) Di vide nds Received.--The credit provided in section 26 (b) . No U nited States
(3) No UNITED STATES INSURANCE BUSINESS.-Foreign insurance business' companies not carrying on an insurance business within the United States shall not be taxable under this section but shall be taxable as other foreign corporations. Definitions .
(b) DEFINITION OF INCOME, ETO.-In the case of an insurance com- pany subject to the tax imposed by this section- "Gross income." (1) GROSS INCOME .-"Gross income" means the sum of (A) the combined gross amount earned during the taxable year, from invest ment in come a nd fro m unde rwriti ng inco me as provid ed in this subsection, computed on the basis of the underwriting and investment exhibit of the ann ual sta tem ent approved by the National Convention of Insurance Commissioners, and (B) gain during the taxable year from the sale or other disposition of property, and (C) all other items constituting gross income under Ante, p.1657 .
section 22 ; "Net income." (2) NET INCOME."Net income" means the gross income as defined in par agraph (1) of this s ubsection less the deductions allowed b y subsection (c) of this section ; Investment in- come ."
(3) INVESTMENT INCOME.-" Investment income" means the gross come ."
amount of income earned during the taxable year from interest dividends, and rents, computed as follows To all interest, dividends and rents received during the taxable year, add interest, dividends and rents due and accrued at the end of the tax able year, and deduc t all interest, div idends and rents due and accrued at the end o f the preceding tax able year ; "Un derwritin g in-
(4) UNDERWRITING INCOME .--"Underwriting income" means the come ." premiums earned on insurance contracts during the taxable year less losses incurred and expenses incurred ; "P remi ums earned
(5) PREMIUMS EARNED ."Premiums earned on insurance co n- on insurance contracts during the taxable tracts during the taxable year" means an amount computed as Yea' ."
follows From the amount of gross premiums written on insurance con- tra cts du ring the taxable year, deduct retu rn premiums and premiums paid for reinsurance . To the result so obtained add unearned premiums on outstanding business a t the end of the preceding taxable year and dedu ct unearned premiums on out- standing business at the end of the taxable year ; "Losses incurred ." (6) L OS SE S IN cu RRE D .-"Losse s incurred" means lo sses incurred during the taxable year on insurance contra cts, computed as follows To losses paid during the taxable year, add salvage and reinsur- ance recoverable outstanding at the end of the preceding taxable year, and deduct salvage and reinsurance recoverable outstanding at the end of the taxable year . To the result so obtained add all unpaid losses outstanding at the end of the taxable year and deduct unpaid losses outstanding at the end of the preceding taxable year ; "Expensesincurred ."
(7) EXP ENSES INCURR ED .-"Expenses incurred" mean s all ex- penses shown on the annual statement approved by the National
