[Code of Federal Regulations]
[Title 26, Volume 8]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.821-5]

[Page 704-705]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
Determination of Tax Liability--Table of Contents
 
Sec. 1.821-5  Special transitional underwriting loss.

    (a) In general. Section 821(f) provides a special reduction in the 
statutory underwriting income (as defined by section 823(a)(1) and 
paragraph (b)(1) of Sec. 1.823-6) of any company taxable under section 
821(a) which was taxable under section 821 for the five taxable years 
immediately preceding January 1, 1962, and which incurred an 
underwriting loss (as defined in section 821(f)(3) and paragraph (c) of 
this section) for each of such five taxable years.
    (b) Amount of reduction. In the case of a company described in 
section 821(f)(1) and paragraph (a) of this section the statutory 
underwriting income for the taxable year (determined without regard to 
this paragraph) shall be reduced by an amount equal to the amount by 
which:
    (1) The sum of the underwriting losses of such company for the five 
taxable years immediately preceding January 1, 1962, exceeds
    (2) The total amount by which the company's statutory underwriting 
income was reduced by reason of section 821(f) and this section for 
prior taxable years.
    (c) Underwriting loss defined. For purposes of computing the amount 
of the reduction available under section 821(f) and paragraph (a) of 
this section, the term underwriting loss means statutory underwriting 
loss (as defined by section 823(a)(2) and paragraph (b)(2) of Sec. 
1.823-6) computed without any deduction under section 824(a) and 
paragraph (a) of Sec. 1.824-1 (relating to deduction to provide 
protection against losses) and without any deduction under section 
832(c)(11) (relating to dividends and similar distributions paid or 
declared to policyholders). For rules relating to the definition of 
dividends and similar distributions paid or declared to policyholders, 
see paragraph (a) of Sec. 1.832-5.

[[Page 705]]

    (d) Years of applicability. Section 821(f)(4) provides that the 
special reduction of statutory underwriting income allowed by section 
821(f)(2) and paragraph (b) of this section shall apply to any taxable 
year beginning after December 31, 1962, and before January 1, 1968, for 
which the taxpayer is subject to the tax imposed by section 821(a).

[T.D. 6681, 28 FR 11112, Oct. 17, 1963]