Paperwork Reduction Act Notice.
We ask for the information on this form to carry out the Internal
Revenue laws of the United States. You are required to give us the
information. We need it to ensure that you are complying with these
laws and to allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form
that is subject to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Books or records relating to a
form or its instructions must be retained as long as their contents
may become material in the administration of any Internal Revenue law.
Generally, tax returns and return information are confidential, as
required by section 6103.
The time needed to complete and file this form will vary depending
on individual circumstances. The estimated average time is:
Recordkeeping |
55 hr., 59 min. |
Learning about the law or the form |
2 hr., 34 min. |
Preparing and sending the form to the IRS |
3 hr., 36 min. |
If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would be
happy to hear from you. You can write to the Tax Forms Committee,
Western Area Distribution Center, Rancho Cordova, CA 95743-0001.
Do not send the tax form to this address. Instead, see
Where To File on page 1.
General Instructions
Purpose of Form
Form 8390 is used to gather information regarding the earnings
rates of the 50 largest domestic stock life insurance companies (stock
companies), as determined by the IRS, and all mutual life insurance
companies (mutual companies).
This information is used to compute the differential earnings
rate, as defined in section 809(c), which affects the tax
liability of all mutual companies.
Affiliated Groups
All life insurance members of an affiliated group must cooperate in
filing a single Form 8390. One member should be designated as the
lead company to compute a single earnings rate for all members.
Attach to Form 8390:
- A separate Part I for each member;
- A schedule explaining all adjustments made to eliminate
double counting of items, e.g., intercorporate dividends or the value
of the stock of a life insurance subsidiary; and
- A reconciliation for all items if the total of those items
for the group as a whole differs from the sum of the totals of the
individual members.
For Form 8390, an affiliated group is defined under section 1504(a)
without regard to section 1504(b)(2). In general, affiliation status
is figured as of the last day of the tax year. Proper accounting must
be made for changes in affiliation during a tax year. If two or more
mutual companies own at least 80% of the stock of a single life
insurance company, each mutual company must include its share of each
item from the subsidiary (referred to in Part I). In the case of a
stock company described in section 809(h)(3), make appropriate
adjustments on an eliminations schedule.
When To File
Form 8390 must be filed no later than October 1, 2001.
Where To File
File Form 8390 with the:
Internal Revenue Service
P.O. Box 5137, Grand Central Station
Attention: Group 1169, 6th Floor
New York, NY 10163
Period Covered
File the 2000 Form 8390 for calendar year 2000.
Method of Reporting
Report all amounts on the form and schedules in U.S. dollars.
Attach a detailed explanation if converting from a foreign currency.
All items must reflect both the general and separate accounts.
Amounts included in equity under section 809 generally refer to
amounts shown on the NAIC Annual Statement (the Annual Statement).
However, an item should not be classified or characterized on the
Annual Statement in an attempt to avoid the requirements of section
809.
Penalties
Any life insurance company failing to file on time or provide all
information requested may be subject to penalties under section 7203
as well as other penalties.
Who Must Sign
The return must be signed and dated by:
- The president, vice president, treasurer, assistant
treasurer, chief accounting officer or
- Any other officer (such as tax officer) authorized to
sign.
Receivers, trustees, or assignees must also sign and date any
return required to be filed on behalf of a corporation.
When an affiliated group files Form 8390, only the lead company
must sign the return.
If a corporate officer completes Form 8390, the paid preparer's
space should remain blank. Anyone who prepares Form 8390 but does not
charge the corporation should not sign the return. Generally, anyone
who is paid to prepare the return must sign it and fill in the Paid
Preparer's Use Only area.
The paid preparer must complete the required preparer
information and:
- Sign the return, by hand, in the space provided for the
preparer's signature (signature stamps or labels are not
acceptable).
- Give a copy of the return to the taxpayer.
Attachments
If more space is needed, attach additional sheets. Each attachment
must show the corporation's name and identifying number, as well as
the required information, and must follow the format of the form.
Specific Instructions
Address
Include the suite, room, or other unit number after the street
address. If the post office does not deliver mail to the street
address and the corporation has a P.O. box, show the box number
instead.
Item E
Stock subsidiaries of mutual life insurance companies should not
check Mutual.
Part I - Earnings Rate
Line 1.
Enter the amount from the Capital and Surplus Account of the Annual
Statement. Do not include surplus notes.
Line 2.
Nonadmitted financial assets are financial assets not
permitted to be included as part of the corporation's financial
condition for state regulatory purposes.
Generally, the amount entered on line 2 includes the sum of lines 1
through 10, column 3, of the Assets section of the Annual
Statement. This also includes, at their fair market value, financial
assets shown on the Annual Statement. Attach a schedule of all
nonadmitted assets (both financial and nonfinancial) other than:
- Due and accrued investment income,
- Investments in office furnishings or fixtures, or
- Agents' balances owed to the corporation.
Line 3.
Enter the total (as reported on the Annual Statement) of the
following items:
- Life insurance reserves as defined in section 816(b);
- Unearned premiums and unpaid losses included in total
reserves under section 816(c)(2);
- Amounts (discounted at the appropriate rate of interest)
necessary to satisfy the obligations under insurance and annuity
contracts not involving life, accident, or health
contingencies;
- Dividend accumulations and other amounts held at interest in
connection with insurance and annuity contracts;
- Premiums received in advance and liabilities for premium
deposit funds; and
- Reasonable special contingency reserves under contracts of
group term life insurance or group accident and health insurance that
are established and maintained for the provision of insurance on
either retired lives or for premium stabilization, or both.
Line 4b.
Include reserves for due and unpaid premiums, as well as reserves
for deferred and uncollected premiums, if the establishment of the
reserve is not permitted under section 811(c).
Line 4c.
Enter the amount of reserves related to items entered on lines 14a
through 14c. Also, include any other adjustments to line 3 and attach
a schedule showing those adjustments.
Lines 5 and 6.
See the instructions for Schedule A - Reserves
below.
Line 10.
Attach a schedule showing the nature and amount of:
- Each voluntary reserve, and
- Any Annual Statement reserve that is not:
- An item listed in section 807(c),
- Part of the policyholder dividend reserve,
- A deficiency reserve included on line 4a, and
- Included on line 10.
For a stock company, any reserve treated as a voluntary reserve for
the base period must be treated as a voluntary reserve for subsequent
years unless there is a demonstrated change in circumstances.
Line 11.
Policyholder dividends include excess interest, premium
adjustments, and experience-rated refunds. Any Annual Statement
provision for policyholder dividends payable after the close of the
following tax year is treated as a voluntary reserve.
Line 12.
For purposes of section 809, the equity base of any foreign mutual
company as of the close of any tax year shall be increased by the
excess of:
- The required U.S. assets of the company (determined under
section 842(b)(2)), over
- The mean of the assets held in the United States during the
tax year.
Attach a schedule showing the computation, where applicable, with
appropriate line references to the Annual Statement.
Line 14a.
The equity base of any mutual company shall be reduced by an amount
equal to the portion of the equity base attributable to the life
insurance business multiplied by a fraction:
- The numerator of which is the portion of the tax reserves
that is allocable to life insurance contracts issued on the life of
residents of countries in the Western Hemisphere that are not
contiguous to the United States, and
- The denominator of which is the amount of the tax reserves
allocable to life insurance contracts.
The equity base reduction does not have to be made unless the
fraction determined above exceeds 1/20.
Line 14b.
Enter an amount on this line only if an election has been made
under section 814 (or section 819A of prior law).
Line 17a.
Enter the amount from page 4, line 27 of the Summary of Operations
section of the Annual Statement.
Line 17b.
Include all section 808 policyholder dividends (without regard to
section 808(c)(2)) paid or accrued during the tax year. Do not include
any amounts taken into account in determining the amount from the
Annual Statement entered on line 17a.
Line 17e.
Enter the amount of the amortization of the interest maintenance
reserve (IMR) from line 4a, column 1, of the Summary of Operations
section of the Annual Statement.
Line 18.
Include in columns (a) and (b) all statutory reserves (including
deficiency reserves) taken into account in determining gain or (loss)
from operations on the Annual Statement. Do not include reserves for
due and unpaid premiums or for deferred and uncollected premiums if
the establishment of the reserves is not permitted under section
811(c).
Line 21.
Include realized capital gains and (losses) (generally as
determined for Annual Statement purposes) only to the extent not
included in Annual Statement gain or (loss) from operations in the
current year or in previous years.
Line 22.
Other adjustments include any separate account net operating gains
or (losses) and any other amounts for any item charged directly to the
Capital and Surplus Account of the Annual Statement, but which could
be taken as a deduction in computing life insurance company taxable
income. Attach a schedule showing all computations.
Schedule A - Reserves
Schedule A is used to report additional information concerning
statutory reserves (Part I, line 5) and tax reserves (Part I, line 6)
for the current year.
Statutory reserves means the total amount included in
the Annual Statement for items described in section 807(c). Such term
must not include any reserve attributable to a deferred and
uncollected premium if the establishment of such reserve is not
permitted under section 811(c).
Tax reserves means the total of the items described in
section 807(c) as determined for purposes of section 807.
In determining the amount of tax reserves of a subsidiary of a
mutual company for contracts issued before January 1, 1985, under a
plan of life insurance in existence on July 1, 1983, the provision of
section 811(d) regarding guaranteed interest payments in excess of the
prevailing state assumed rate beyond the current tax year will not
apply.
Do not subdivide the uniform product categories and subcategories
in this schedule by the different valuation characteristics separately
reported on Exhibits 8 and 9 of the Annual Statement. If the reserves
under a group of policies clearly fit in a major product category but
not in a product subcategory under that category, report the reserves
in the most appropriate subcategory. When determining the most
appropriate category, choose a subcategory that has similar valuation
characteristics. If the valuation characteristics are unknown, use a
reasonable allocation method to allocate among the appropriate product
subcategories. Attach a description of the policies allocated with an
explanation of why the allocation is appropriate.
Calculation of Reserves.
The tax reserves reported in the subcategories under categories A
through I of Schedule A, must be calculated as accurately as those on
Form 1120-L, U.S. Life Insurance Company Income Tax Return.
Product Categories.
Uniform assumptions concerning paid-to dates and mode of premium
payment may be made for all product types included in the same
category. Reserves ceded under yearly renewable term reinsurance need
only be stated in total in each category.
Category A - Individual Life Insurance Policies.
The reserves under the subcategories of term, permanent, or
flexible premium policies must not include supplemental benefit
reserves described in section 807(e)(3)(D).
The reserves under the subcategories of permanent or flexible
premium policies (lines 2 and 3) must be separately stated for
policies issued in the year to which this return relates, the
immediately preceding year, the 2nd through 9th preceding years, and
years before the 9th preceding year. On lines 2a through 2d and lines
3a through 3d, state the corresponding amount of insurance in force.
Category I - Miscellaneous.
List only those reserves that do not fall in categories A through
H. Attach a description of the reserves placed in this category, along
with an explanation of why the category is appropriate.
First
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