,i  #aaeth ,,congress  #ast ,session    
,h4 ,r4 #baha  ,,in ,,the ,,house ,,of  
,,representatives  ,april #bf1 #bjag,mr4
 ,tiberi 7for himself1 ,mr4 ,larson of  
,connecticut1 ,mr4 ,paulsen1 and ,mr4   
,reed7 introduced the following bill2   
which was referred to the ,committee on 
,ways and ,means  ,a ,,bill  ,to amend  
the ,internal ,revenue ,code of #aihf to
 permit the consolidation of life       
insurance companies with other          
companies4  #a4 ,short title ,this ,act 
may be cited as the ,insurance ,company 
,tax ,modernization and ,parity ,act of 
#bjag4  #b4 ,consolidation of life      
insurance companies with other companies
 permitted  7a7 ,in general ,section    
#aejd7;b7 of the ,internal ,revenue     
,code of #aihf is amended by striking   
paragraph 7#b7 and by redesignating     
paragraphs 7#c7 through 7#h7 as         
paragraphs 7#b7 through 7#g71           
respectively4  7b7 ,conforming          
amendments  7#a7 ,section #aejc of the  
,internal ,revenue ,code of #aihf is    

amended by striking subsection 7c7 and  
by redesignating subsections 7d71 7e71  
and 7f7 as subsections 7c71 7d71 and    
7e71 respectively4  7#b7 ,section #aejd 
of such ,code is amended by striking    
subsection 7c7 and by redesignating     
subsections 7d71 7e71 and 7f7 as        
subsections 7c71 7d71 and 7e71          
respectively4  7#c7 ,section            
#bdc7;b77#b77;,a7 of such ,code is      
amended by striking sections            
#aejd7;b77#b71 #aejd7;b77#d71 and       
#aejd7;c7 and inserting section         
#aejd7;b77#c74  7#d7 ,section           
#hje7;a77#d77;,e7 of such ,code is      
amended by striking #aejd7;b77#c7 and   
inserting #aejd7;b77#b74  7#e7 ,section 
#hah7;e77#a7 of such ,code is amended to
 read as follows3  7#a7 ,items of       
companies other than insurance companies
 ,if an affiliated group includes       
members which are and which are not     
taxed under section #hja1 all items of  
the members of such group which are not 
taxed under section #hja shall not be   

taken into account in determining the   
amount of the tentative ,,licti of      
members of such group which are taxed   
under section #hja4  4  7#f7 ,section   
#hcb7;b77#e77;,d77ii77,,ii7 of such     
,code is amended by striking            
#aejd7;b77#c7 and inserting             
#aejd7;b77#b74  7#g7 ,section           
#hfd7;e77#e77;,a7 of such ,code is      
amended by striking paragraph 7#d7 and  
inserting paragraph 7#c74  7#h7 ,section
 #icf7;i77#e77;,a7 of such ,code is     
amended by striking section             
#aejd7;b77#c7 or 7#d7 and inserting     
section #aejd7;b77#b7 or 7#c74  7#i7    
,section #ieb7;c77#a77;,b77vii77,,ii7 of
 such ,code is amended by striking      
#aejd7;b77#c7 and inserting             
#aejd7;b77#b74  7#aj7 ,section          
#iec7;d77#c7 of such ,code is amended by
 striking #aejc7;d7 and inserting       
#aejc7;c74  7#aa7 ,section              
#ied7;h77#d77;,f77ii7 of such ,code is  
amended by striking #aejd7;b77#c7 and   
inserting #aejd7;b77#b74  7#ab7 ,section

 #faff7;b77#aj77;,b77ii77,v7 of such    
,code is amended by striking            
#aejd7;b77#c7 and inserting             
#aejd7;b77#b74  7c7 ,effective date ,the
 amendments made by this section shall  
apply to taxable years beginning after  
,december #ca1 #bjag4  #c4 ,phase-in of 
application of certain losses against   
income of insurance companies  7a7      
,phase-,in  7#a7 ,in general ,for       
taxable years beginning after ,december 
#ca1 #bjag1 and before ,january #a1     
#bjbd1 if-- 7,a7 an affiliated group    
includes one or more domestic insurance 
companies subject to tax under section  
#hja of the ,internal ,revenue ,code of 
#aihf2 and  7,b7 the consolidated       
taxable income of the members of the    
group not taxed under such section #hja 
results in a consolidated net operating 
loss for such taxable year1  then1 under
 regulations prescribed by the          
,secretary of the ,treasury or his      
delegate1 the amount of such loss       
7including carryovers from years prior  

to the effective date of this provision7
 which cannot be absorbed in the        
applicable carryback periods against the
 taxable income of such members not     
taxed under such section #hja shall be  
taken into account in determining the   
consolidated taxable income of the      
affiliated group for such taxable year  
to the extent of the applicable         
percentage of such loss or the          
applicable percentage of the taxable    
income of the members taxed under such  
section #hja1 whichever is less4 ,the   
unused portion of such loss shall be    
available as a carryover1 subject to the
 same limitations 7but determined based 
on the applicable percentage with       
respect to the year to which carried and
 applicable to the sum of the loss for  
the carryover year and the loss 7or     
losses7 carried over to such year71 in  
applicable carryover years4  7#b7       
,applicable percentage ,for purposes of 
paragraph 7#a71 the applicable          
percentage shall be determined in       

accordance with the following table3    
,for taxable years,the applicable       
beginning in3percentage is3  #bjahdj    
#bjaiej #bjbjfj #bjbagj #bjbbhj #bjbcij4
  7b7 ,no carryback before ,january #a1 
#bjah ,to the extent that a consolidated
 net operating loss is allowed or       
increased by reason of this section or  
the amendments made by this ,act1 such  
loss 7or increase in such loss1 as the  
case may be7 may not be carried back to 
a taxable year beginning before ,january
 #a1 #bjah4  7c7 ,nontermination of     
group ,no affiliated group shall        
terminate solely as a result of this    
section or the amendments made by this  
,act4  7d7 ,subsidiary stock basis      
adjustments ,a member corporation's     
basis in the stock of a subsidiary      
corporation shall be adjusted upon      
consolidation to reflect the            
preconsolidation income1 gain1          
deduction1 loss1 distributions1 and     
other relevant amounts during a period  
when such corporations were members of  

an affiliated group 7determined without 
regard to section #aejd7;b77#b7 of the  
,internal ,revenue ,code of #aihf as in 
effect on the day before the date of    
enactment of this ,act7 but were not    
included in a consolidated return of    
such group by operation of section      
#aejd7;c77#b77;,a7 of such ,code 7as in 
effect on the day before the date of the
 enactment of this ,act74  7e7 ,waiver  
of #e-,year waiting period ,an automatic
 waiver from the #e-year waiting period 
for reconsolidation provided in section 
#aejd7;a77#c7 of the ,internal ,revenue 
,code of #aihf shall be granted to any  
corporation which was previously an     
includible corporation but was          
subsequently deemed a nonincludible     
corporation as a result of becoming a   
subsidiary of a corporation which was   
not an includible corporation solely by 
operation of section #aejd7;c77#b7 of   
such ,code 7as in effect on the day     
before the date of enactment of this    
,act71 subject to such conditions as the

 ,secretary may prescribe4