{"identifier":"/us/usc/t26/s848","title":26,"num":"\u00a7\u202f848.","heading":"Capitalization of certain policy acquisition expenses","text":"\u00a7\u202f848.\nCapitalization of certain policy acquisition expenses\n(a)\nGeneral rule\nIn the case of an insurance company\u2014\n(1) specified policy acquisition expenses for any taxable year shall be capitalized, and\n(2) such expenses shall be allowed as a deduction ratably over the 180-month period beginning with the first month in the second half of such taxable year.\n(b)\n5-year amortization for first $5,000,000 of specified policy acquisition expenses\n(1)\nIn general\nParagraph (2) of subsection (a) shall be applied with respect to so much of the specified policy acquisition expenses of an insurance company for any taxable year as does not exceed $5,000,000 by substituting \u201c60-month\u201d for \u201c180-month\u201d.\n(2)\nPhase-out\nIf the specified policy acquisition expenses of an insurance company exceed $10,000,000 for any taxable year, the $5,000,000 amount under paragraph (1) shall be reduced (but not below zero) by the amount of such excess.\n(3)\nSpecial rule for members of controlled group\nIn the case of any controlled group\u2014\n(A) all insurance companies which are members of such group shall be treated as 1 company for purposes of this subsection, and\n(B) the amount to which paragraph (1) applies shall be allocated among such companies in such manner as the Secretary may prescribe.\nFor purposes of the preceding sentence, the term \u201ccontrolled group\u201d means any controlled group of corporations as defined in section 1563(a); except that subsections (a)(4) and (b)(2)(D) of section 1563 shall not apply, and subsection (b)(2)(C) of section 1563 shall not apply to the extent it excludes a foreign corporation to which section 842 applies.\n(4)\nException for acquisition expenses attributable to certain reinsurance contracts\nParagraph (1) shall not apply to any specified policy acquisition expenses for any taxable year which are attributable to premiums or other consideration under any reinsurance contract.\n(c)\nSpecified policy acquisition expenses\nFor purposes of this section\u2014\n(1)\nIn general\nThe term \u201cspecified policy acquisition expenses\u201d means, with respect to any taxable year, so much of the general deductions for such taxable year as does not exceed the sum of\u2014\n(A) 2.09 percent of the net premiums for such taxable year on specified insurance contracts which are annuity contracts,\n(B) 2.45 percent of the net premiums for such taxable year on specified insurance contracts which are group life insurance contracts, and\n(C) 9.2 percent of the net premiums for such taxable year on specified insurance contracts not described in subparagraph (A) or (B).\n(2)\nGeneral deductions\nThe term \u201cgeneral deductions\u201d means the deductions provided in part VI of subchapter B (sec. 161 and following, relating to itemized deductions) and in part I of subchapter D (sec. 401 and following, relating to pension, profit sharing, stock bonus plans, etc.).\n(d)\nNet premiums\nFor purposes of this section\u2014\n(1)\nIn general\nThe term \u201cnet premiums\u201d means, with respect to any category of specified insurance contracts set forth in subsection (c)(1), the excess (if any) of\u2014\n(A) the gross amount of premiums and other consideration on such contracts, over\n(B) return premiums on such contracts and premiums and other consideration incurred for reinsurance of such contracts.\nThe rules of section 803(b) shall apply for purposes of the preceding sentence.\n(2)\nAmounts determined on accrual basis\nIn the case of an insurance company subject to tax under part II of this subchapter, all computations entering into determinations of net premiums for any taxable year shall be made in the manner required under section 811(a) for life insurance companies.\n(3)\nTreatment of certain policyholder dividends and similar amounts\nNet premiums shall be determined without regard to section 808(e) and without regard to other similar amounts treated as paid to, and returned by, the policyholder.\n(4)\nSpecial rules for reinsurance\n(A) Premiums and other consideration incurred for reinsurance shall be taken into account under paragraph (1)(B) only to the extent such premiums and other consideration are includible in the gross income of an insurance company taxable under this subchapter or are subject to tax under this chapter by reason of subpart F of part III of subchapter N.\n(B) The Secretary shall prescribe such regulations as may be necessary to ensure that premiums and other consideration with respect to reinsurance are treated consistently by the ceding company and the reinsurer.\n(e)\nClassification of contracts\nFor purposes of this section\u2014\n(1)\nSpecified insurance contract\n(A)\nIn general\nExcept as otherwise provided in this paragraph, the term \u201cspecified insurance contract\u201d means any life insurance, annuity, or noncancellable accident and health insurance contract (or any combination thereof).\n(B)\nExceptions\nThe term \u201cspecified insurance contract\u201d shall not include\u2014\n(i) any pension plan contract (as defined in section 818(a)),\n(ii) any flight insurance or similar contract,\n(iii) any qualified foreign contract (as defined in section 807(e)(3) without regard to paragraph (5) of this subsection),\n(iv) any contract which is an Archer MSA (as defined in section 220(d)), and\n(v) any contract which is a health savings account (as defined in section 223(d)).\n(2)\nGroup life insurance contract\nThe term \u201cgroup life insurance contract\u201d means any life insurance contract\u2014\n(A) which covers a group of individuals defined by reference to employment relationship, membership in an organization, or similar factor,\n(B) the premiums for which are determined on a group basis, and\n(C) the proceeds of which are payable to (or for the benefit of) persons other than the employer of the insured, an organization to which the insured belongs, or other similar person.\n(3)\nTreatment of annuity contracts combined with noncancellable accident and health insurance\nAny annuity contract combined with noncancellable accident and health insurance shall be treated as a noncancellable accident and health insurance contract and not as an annuity contract.\n(4)\nTreatment of guaranteed renewable contracts\nThe rules of section 816(e) shall apply for purposes of this section.\n(5)\nTreatment of reinsurance contract\nA contract which reinsures another contract shall be treated in the same manner as the reinsured contract.\n(6)\nTreatment of certain qualified long-term care insurance contract arrangements\nAn annuity or life insurance contract which includes a qualified long-term care insurance contract as a part of or a rider on such annuity or life insurance contract shall be treated as a specified insurance contract not described in subparagraph (A) or (B) of subsection (c)(1).\n(f)\nSpecial rule where negative net premiums\n(1)\nIn general\nIf for any taxable year there is a negative capitalization amount with respect to any category of specified insurance contracts set forth in subsection (c)(1)\u2014\n(A) the amount otherwise required to be capitalized under this section for such taxable year with respect to any other category of specified insurance contracts shall be reduced (but not below zero) by such negative capitalization amount, and\n(B) such negative capitalization amount (to the extent not taken into account under subparagraph (A))\u2014\n(i) shall reduce (but not below zero) the unamortized balance (as of the beginning of such taxable year) of the amounts previously capitalized under subsection (a) (beginning with the amount capitalized for the most recent taxable year), and\n(ii) to the extent taken into account as such a reduction, shall be allowed as a deduction for such taxable year.\n(2)\nNegative capitalization amount\nFor purposes of paragraph (1), the term \u201cnegative capitalization amount\u201d means, with respect to any category of specified insurance contracts, the percentage (applicable under subsection (c)(1) to such category) of the amount (if any) by which\u2014\n(A) the amount determined under subparagraph (B) of subsection (d)(1) with respect to such category, exceeds\n(B) the amount determined under subparagraph (A) of subsection (d)(1) with respect to such category.\n(g)\nTreatment of certain ceding commissions\nNothing in any provision of law (other than this section or section 197) shall require the capitalization of any ceding commission incurred on or after\nSeptember 30, 1990\n(h)\nSecretarial authority to adjust capitalization amounts\n(1)\nIn general\nExcept as provided in paragraph (2), the Secretary may provide that a type of insurance contract will be treated as a separate category for purposes of this section (and prescribe a percentage applicable to such category) if the Secretary determines that the deferral of acquisition expenses for such type of contract which would otherwise result under this section is substantially greater than the deferral of acquisition expenses which would have resulted if actual acquisition expenses (including indirect expenses) and the actual useful life for such type of contract had been used.\n(2)\nAdjustment to other contracts\nIf the Secretary exercises his authority with respect to any type of contract under paragraph (1), the Secretary shall adjust the percentage which would otherwise have applied under subsection (c)(1) to the category which includes such type of contract so that the exercise of such authority does not result in a decrease in the amount of revenue received under this chapter by reason of this section for any fiscal year.","url":"https://projectusc.org/usc/t26/s848.html","content":[{"t":"sec","id":"/us/usc/t26/s848","children":[{"t":"num","text":"\u00a7\u202f848."},{"t":"heading","text":"Capitalization of certain policy acquisition expenses"},{"t":"subsec","id":"/us/usc/t26/s848/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"General rule"},{"t":"chapeau","text":"In the case of an insurance company\u2014"},{"t":"para","id":"/us/usc/t26/s848/a/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" specified policy acquisition expenses for any taxable year shall be capitalized, and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/a/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" such expenses shall be allowed as a deduction ratably over the 180-month period beginning with the first month in the second half of such taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s848/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"5-year amortization for first $5,000,000 of specified policy acquisition expenses"},{"t":"para","id":"/us/usc/t26/s848/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Paragraph (2) of subsection (a) shall be applied with respect to so much of the specified policy acquisition expenses of an insurance company for any taxable year as does not exceed $5,000,000 by substituting \u201c60-month\u201d for \u201c180-month\u201d.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Phase-out"},{"t":"content","children":[{"t":"p","text":"If the specified policy acquisition expenses of an insurance company exceed $10,000,000 for any taxable year, the $5,000,000 amount under paragraph (1) shall be reduced (but not below zero) by the amount of such excess.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/b/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Special rule for members of controlled group"},{"t":"chapeau","text":"In the case of any controlled group\u2014"},{"t":"subpara","id":"/us/usc/t26/s848/b/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" all insurance companies which are members of such group shall be treated as 1 company for purposes of this subsection, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/b/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the amount to which paragraph (1) applies shall be allocated among such companies in such manner as the Secretary may prescribe.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"For purposes of the preceding sentence, the term \u201ccontrolled group\u201d means any controlled group of corporations as defined in section 1563(a); except that subsections (a)(4) and (b)(2)(D) of section 1563 shall not apply, and subsection (b)(2)(C) of section 1563 shall not apply to the extent it excludes a foreign corporation to which section 842 applies.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/b/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Exception for acquisition expenses attributable to certain reinsurance contracts"},{"t":"content","children":[{"t":"p","text":"Paragraph (1) shall not apply to any specified policy acquisition expenses for any taxable year which are attributable to premiums or other consideration under any reinsurance contract.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s848/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Specified policy acquisition expenses"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s848/c/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201cspecified policy acquisition expenses\u201d means, with respect to any taxable year, so much of the general deductions for such taxable year as does not exceed the sum of\u2014"},{"t":"subpara","id":"/us/usc/t26/s848/c/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" 2.09 percent of the net premiums for such taxable year on specified insurance contracts which are annuity contracts,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/c/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" 2.45 percent of the net premiums for such taxable year on specified insurance contracts which are group life insurance contracts, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/c/1/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" 9.2 percent of the net premiums for such taxable year on specified insurance contracts not described in subparagraph (A) or (B).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/c/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"General deductions"},{"t":"content","children":[{"t":"p","text":"The term \u201cgeneral deductions\u201d means the deductions provided in part VI of subchapter B (sec. 161 and following, relating to itemized deductions) and in part I of subchapter D (sec. 401 and following, relating to pension, profit sharing, stock bonus plans, etc.).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s848/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Net premiums"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s848/d/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201cnet premiums\u201d means, with respect to any category of specified insurance contracts set forth in subsection (c)(1), the excess (if any) of\u2014"},{"t":"subpara","id":"/us/usc/t26/s848/d/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the gross amount of premiums and other consideration on such contracts, over","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/d/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" return premiums on such contracts and premiums and other consideration incurred for reinsurance of such contracts.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"The rules of section 803(b) shall apply for purposes of the preceding sentence.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/d/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Amounts determined on accrual basis"},{"t":"content","children":[{"t":"p","text":"In the case of an insurance company subject to tax under part II of this subchapter, all computations entering into determinations of net premiums for any taxable year shall be made in the manner required under section 811(a) for life insurance companies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/d/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Treatment of certain policyholder dividends and similar amounts"},{"t":"content","children":[{"t":"p","text":"Net premiums shall be determined without regard to section 808(e) and without regard to other similar amounts treated as paid to, and returned by, the policyholder.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/d/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Special rules for reinsurance"},{"t":"subpara","id":"/us/usc/t26/s848/d/4/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" Premiums and other consideration incurred for reinsurance shall be taken into account under paragraph (1)(B) only to the extent such premiums and other consideration are includible in the gross income of an insurance company taxable under this subchapter or are subject to tax under this chapter by reason of subpart F of part III of subchapter N.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/d/4/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" The Secretary shall prescribe such regulations as may be necessary to ensure that premiums and other consideration with respect to reinsurance are treated consistently by the ceding company and the reinsurer.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s848/e","children":[{"t":"num","text":"(e)"},{"t":"heading","text":"Classification of contracts"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s848/e/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Specified insurance contract"},{"t":"subpara","id":"/us/usc/t26/s848/e/1/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Except as otherwise provided in this paragraph, the term \u201cspecified insurance contract\u201d means any life insurance, annuity, or noncancellable accident and health insurance contract (or any combination thereof).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/e/1/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Exceptions"},{"t":"chapeau","text":"The term \u201cspecified insurance contract\u201d shall not include\u2014"},{"t":"clause","id":"/us/usc/t26/s848/e/1/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" any pension plan contract (as defined in section 818(a)),","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s848/e/1/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" any flight insurance or similar contract,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s848/e/1/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" any qualified foreign contract (as defined in section 807(e)(3) without regard to paragraph (5) of this subsection),","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s848/e/1/B/iv","children":[{"t":"num","text":"(iv)"},{"t":"content","text":" any contract which is an Archer MSA (as defined in section 220(d)), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s848/e/1/B/v","children":[{"t":"num","text":"(v)"},{"t":"content","text":" any contract which is a health savings account (as defined in section 223(d)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/e/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Group life insurance contract"},{"t":"chapeau","text":"The term \u201cgroup life insurance contract\u201d means any life insurance contract\u2014"},{"t":"subpara","id":"/us/usc/t26/s848/e/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" which covers a group of individuals defined by reference to employment relationship, membership in an organization, or similar factor,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/e/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the premiums for which are determined on a group basis, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/e/2/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" the proceeds of which are payable to (or for the benefit of) persons other than the employer of the insured, an organization to which the insured belongs, or other similar person.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/e/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Treatment of annuity contracts combined with noncancellable accident and health insurance"},{"t":"content","children":[{"t":"p","text":"Any annuity contract combined with noncancellable accident and health insurance shall be treated as a noncancellable accident and health insurance contract and not as an annuity contract.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/e/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Treatment of guaranteed renewable contracts"},{"t":"content","children":[{"t":"p","text":"The rules of section 816(e) shall apply for purposes of this section.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/e/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Treatment of reinsurance contract"},{"t":"content","children":[{"t":"p","text":"A contract which reinsures another contract shall be treated in the same manner as the reinsured contract.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/e/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Treatment of certain qualified long-term care insurance contract arrangements"},{"t":"content","children":[{"t":"p","text":"An annuity or life insurance contract which includes a qualified long-term care insurance contract as a part of or a rider on such annuity or life insurance contract shall be treated as a specified insurance contract not described in subparagraph (A) or (B) of subsection (c)(1).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s848/f","children":[{"t":"num","text":"(f)"},{"t":"heading","text":"Special rule where negative net premiums"},{"t":"para","id":"/us/usc/t26/s848/f/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"If for any taxable year there is a negative capitalization amount with respect to any category of specified insurance contracts set forth in subsection (c)(1)\u2014"},{"t":"subpara","id":"/us/usc/t26/s848/f/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the amount otherwise required to be capitalized under this section for such taxable year with respect to any other category of specified insurance contracts shall be reduced (but not below zero) by such negative capitalization amount, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/f/1/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" such negative capitalization amount (to the extent not taken into account under subparagraph (A))\u2014"},{"t":"clause","id":"/us/usc/t26/s848/f/1/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" shall reduce (but not below zero) the unamortized balance (as of the beginning of such taxable year) of the amounts previously capitalized under subsection (a) (beginning with the amount capitalized for the most recent taxable year), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s848/f/1/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" to the extent taken into account as such a reduction, shall be allowed as a deduction for such taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/f/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Negative capitalization amount"},{"t":"chapeau","text":"For purposes of paragraph (1), the term \u201cnegative capitalization amount\u201d means, with respect to any category of specified insurance contracts, the percentage (applicable under subsection (c)(1) to such category) of the amount (if any) by which\u2014"},{"t":"subpara","id":"/us/usc/t26/s848/f/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the amount determined under subparagraph (B) of subsection (d)(1) with respect to such category, exceeds","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s848/f/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the amount determined under subparagraph (A) of subsection (d)(1) with respect to such category.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s848/g","children":[{"t":"num","text":"(g)"},{"t":"heading","text":"Treatment of certain ceding commissions"},{"t":"content","children":[{"t":"p","text":"Nothing in any provision of law (other than this section or section 197) shall require the capitalization of any ceding commission incurred on or after ","children":[{"t":"text","text":"September 30, 1990","tail":", under any contract which reinsures a specified insurance contract."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s848/h","children":[{"t":"num","text":"(h)"},{"t":"heading","text":"Secretarial authority to adjust capitalization amounts"},{"t":"para","id":"/us/usc/t26/s848/h/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Except as provided in paragraph (2), the Secretary may provide that a type of insurance contract will be treated as a separate category for purposes of this section (and prescribe a percentage applicable to such category) if the Secretary determines that the deferral of acquisition expenses for such type of contract which would otherwise result under this section is substantially greater than the deferral of acquisition expenses which would have resulted if actual acquisition expenses (including indirect expenses) and the actual useful life for such type of contract had been used.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s848/h/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Adjustment to other contracts"},{"t":"content","children":[{"t":"p","text":"If the Secretary exercises his authority with respect to any type of contract under paragraph (1), the Secretary shall adjust the percentage which would otherwise have applied under subsection (c)(1) to the category which includes such type of contract so that the exercise of such authority does not result in a decrease in the amount of revenue received under this chapter by reason of this section for any fiscal year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}