Sec. 333. MODIFICATIONS TO ALTERNATIVE TAX FOR CERTAIN SMALL INSURANCE COMPANIES
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## SEC. 333 MODIFICATIONS TO ALTERNATIVE TAX FOR CERTAIN SMALL INSURANCE COMPANIES ###
(a)Additional Requirement for Companies to Which Alternative Tax Applies ####
(1)Added requirement #####
(A)In general **[**[26 U.S.C. 831](/us/usc/t26/s831)**]** Subparagraph
(A)of section 831(b)(2) is amended— ######
(i)by striking “(including interinsurers and reciprocal underwriters)”, and ######
(ii)by striking “ and ” at the end of clause (i), by redesignating clause
(ii)as clause (iii), and by inserting after clause
(i)the following new clause: > > ###### “(ii) > > such company meets the diversification requirements of subparagraph (B), and” > . #####
(B)Diversification requirement Paragraph
(2)of section 831(b) is amended by redesignating subparagraphs
(B)as subparagraph
(C)and by inserting after subparagraph
(A)the following new subparagraph: > > ##### “(B) Diversification requirements > > > ###### “(i) In general > > An insurance company meets the requirements of this subparagraph if— > > > ###### “(I) > > no more than 20 percent of the net written premiums (or, if greater, direct written premiums) of such company for the taxable year is attributable to any one policyholder, or > > > ###### “(II) > > such insurance company does not meet the requirement of subclause
(I)and no person who holds (directly or indirectly) an interest in such insurance company is a specified holder who holds (directly or indirectly) aggregate interests in such insurance company which constitute a percentage of the entire interests in such insurance company which is more than a de minimis percentage higher than the percentage of interests in the specified assets with respect to such insurance company held (directly or indirectly) by such specified holder. > > > ###### “(ii) Definitions > > For purposes of clause (i)(II)— > > > ###### “(I) Specified holder > > The term ‘specified holder’ means, with respect to any insurance company, any individual who holds (directly or indirectly) an interest in such insurance company and who is a spouse or lineal descendant (including by adoption) of an individual who holds an interest (directly or indirectly) in the specified assets with respect to such insurance company. > > > ###### “(II) Specified assets > > The term ‘specified assets’ means, with respect to any insurance company, the trades or businesses, rights, or assets with respect to which the net written premiums (or direct written premiums) of such insurance company are paid. > > > ###### “(III) Indirect interest > > An indirect interest includes any interest held through a trust, estate, partnership, or corporation. > > > ###### “(IV) De minimis > > Except as otherwise provided by the Secretary in regulations or other guidance, 2 percentage points or less shall be treated as de minimis.” > . #####
(C)Conforming amendments **[**[26 U.S.C. 831](/us/usc/t26/s831)**]** The second sentence section 831(b)(2)(A) is amended— ######
(i)by striking “clause (ii)” and inserting “clause (iii)”, and ######
(ii)by striking “clause (i)” and inserting “clauses
(i)and (ii)”. ####
(2)Treatment of related policyholders Clause
(i)of section 831(b)(2)(C), as redesignated by paragraph (1)(B), is amended— #####
(A)by striking “ For purposes of subparagraph (A), in determining ” and inserting > “For purposes of this paragraph— > > > ##### “(I) > > in determining” > , #####
(B)by striking the period at the end and inserting “, and”, and #####
(C)by adding at the end the following new subclause: > > ###### “(II) > > in determining the attribution of premiums to any policyholder under subparagraph (B)(i), all policyholders which are related (within the meaning of section 267(b) or 707(b)) or are members of the same controlled group shall be treated as one policyholder.” > . ####
(3)Reporting Section 831 is amended by redesignating subsection
(d)as subsection
(e)and by inserting after subsection
(c)the following new subsection: > > ### “(d) Reporting > > Every insurance company for which an election is in effect under subsection
(b)for any taxable year shall furnish to the Secretary at such time and in such manner as the Secretary shall prescribe such information for such taxable year as the Secretary shall require with respect to the requirements of subsection (b)(2)(A)(ii).” > . ###
(b)Increase in Limitation on Premiums ####
(1)In general **[**[26 U.S.C. 831](/us/usc/t26/s831)**]** Clause
(i)of section 831(b)(2)(A) is amended by striking “$1,200,000” and inserting “$2,200,000”. ####
(2)Inflation adjustment Paragraph
(2)of section 831(b), as amended by subsection (a)(1)(B), is amended by adding at the end the following new subparagraph: > > ##### “(D) Inflation adjustment > > In the case of any taxable year beginning in a calendar year after 2015, the dollar amount set forth in subparagraph (A)(i) shall be increased by an amount equal to— > > > ###### “(i) > > such dollar amount, multiplied by > > > ###### “(ii) > > the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting ‘calendar year 2013’ for ‘calendar year 1992’ in subparagraph
(B)thereof. > > If the amount as adjusted under the preceding sentence is not a multiple of $50,000, such amount shall be rounded to the next lowest multiple of $50,000.” > . ###
(c)Effective Date **[**[26 U.S.C. 831 note](/us/usc/t26/s831)**]** The amendments made by this section shall apply to taxable years beginning after December 31, 2016.
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Sec. 333
MODIFICATIONS TO ALTERNATIVE TAX FOR CERTAIN SMALL INSURANCE COMPANIES
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