26 USC 808 - Policyholder dividends deduction

U.S Code last checked for updates: May 12, 2024

§ 808.

Policyholder dividends deduction

(a)

Policyholder dividend defined

(b)

Certain amounts included

For purposes of this part, the term “policyholder dividend” includes—

(1)

any amount paid or credited (including as an increase in benefits) where the amount is not fixed in the contract but depends on the experience of the company or the discretion of the management,

(2)

excess interest,

(3)

premium adjustments, and

(4)

experience-rated refunds.

(c)

Amount of deduction

(d)

Definitions

For purposes of this section—

(1)

Excess interest

The term “excess interest” means any amount in the nature of interest—

(A)

paid or credited to a policyholder in his capacity as such, and

(B)

in excess of interest determined at the prevailing State assumed rate for such contract.

(2)

Premium adjustment

(3)

Experience-rated refund

(e)

Treatment of policyholder dividends

For purposes of this part, any policyholder dividend which—

(1)

increases the cash surrender value of the contract or other benefits payable under the contract, or

(2)

reduces the premium otherwise required to be paid,

shall be treated as paid to the policyholder and returned by the policyholder to the company as a premium.

(f)

Coordination of 1984 fresh-start adjustment with acceleration of policyholder dividends deduction through change in business practice

(1)

In general

(2)

Year of change

(3)

Accelerated policyholder dividends deduction defined

(4)

1984 fresh-start adjustment for policyholder dividends

(5)

Separate application with respect to lines of business

(6)

Subsection not to apply to mere change in dividend amount

(7)

Subsection not to apply to policies issued after December 31, 1983

(A)

In general

(B)

Exchanges of substantially similar policies

(8)

Subsection to apply to policies provided under employee benefit plans

(g)

Prevailing State assumed interest rate

For purposes of this subchapter—

(1)

In general

(2)

When rate determined

(Added Pub. L. 98–369, div. A, title II, § 211(a), July 18, 1984, 98 Stat. 732; amended Pub. L. 99–514, title XVIII, § 1821(b), (c), Oct. 22, 1986, 100 Stat. 2838; Pub. L. 108–218, title II, § 205(b)(3), Apr. 10, 2004, 118 Stat. 610; Pub. L. 115–97, title I, § 13517(b)(1), Dec. 22, 2017, 131 Stat. 2147.)

cite as: 26 USC 808