[Code of Federal Regulations]
[Title 26, Volume 10]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.957-2]

[Page 363-364]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.957-2  Controlled foreign corporation deriving income from 
insurance of United States risks.

    (a) In general. For purposes of taking into account only the income 
derived from the insurance of United States risks under Sec. 1.953-1, 
the term ``controlled foreign corporation'' means any foreign 
corporation of which more than 25 percent, but not more than 50 percent, 
of the total combined voting power of all classes of stock entitled to 
vote is owned within the meaning of section 958(a), or is considered as 
owned by applying the rules of ownership of section 958(b), by United 
States shareholders on any day of the taxable year of such foreign 
corporation, but only if the gross amount of premiums received by such 
foreign corporation during such taxable year which are attributable to 
the reinsuring and the issuing of insurance and annuity contracts in 
connection with United States risks, as defined in Sec. 1.953-2 or 
1.953-3, exceeds 75 percent of the gross amount of all premiums received 
by such foreign corporation during such year which are attributable to 
the reinsuring and the issuing of insurance and annuity contracts in 
connection with all risks. The subpart F income for a taxable year of a 
foreign corporation which is a controlled foreign corporation for such 
taxable year within the meaning of this paragraph shall, subject to the 
provisions of section 952(b), (c), and (d), and Sec. 1.952-1, include 
only the income derived from the insurance of United States risks, as 
determined under Sec. 1.953-1.
    (b) Gross amount of premiums defined. For a foreign corporation 
which is engaged in the business of reinsuring or issuing insurance or 
annuity contracts and which, if it were a domestic corporation engaged 
only in such business, would be taxable as--

[[Page 364]]

    (1) A life insurance company to which part I (sections 801 through 
820) of subchapter L of the Code applies,
    (2) A mutual insurance company to which part II (sections 821 
through 826) of subchapter L of the Code applies, or
    (3) A mutual marine insurance or other insurance company to which 
part III (sections 831 and 832) of subchapter L of the Code applies,

the term ``gross amount of premiums'' means, for purposes of paragraph 
(a) of this section, the gross amount of premiums and other 
consideration which are taken into account by a life insurance company 
under section 809(c)(1). Determinations for purposes of this paragraph 
shall be made without regard to section 501(a).

[T.D. 6795, 30 FR 942, Jan. 29, 1965]