[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1668 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1668

    To amend the Internal Revenue Code of 1986 with respect to the 
   treatment of deposits under certain perpetual insurance policies.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 2, 1993

  Mr. Cardin introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 with respect to the 
   treatment of deposits under certain perpetual insurance policies.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TREATMENT OF DEPOSITS UNDER CERTAIN PERPETUAL INSURANCE 
              POLICIES.

    (a) General Rule.--Section 7872 of the Internal Revenue Code of 
1986 (relating to treatment of loans with below-market interest rates) 
is amended by redesignating subsection (h) as subsection (i) and by 
inserting after subsection (g) the following new subsection:
    ``(h) Treatment of Deposits Under Certain Perpetual Insurance 
Policies.--
            ``(1) In general.--This section shall not apply to any 
        deposit made by a policyholder under a qualified perpetual 
        policy.
            ``(2) Qualified perpetual policy.--For purposes of 
        paragraph (1), the term `qualified perpetual policy' means any 
        insurance policy--
                    ``(A) which provides insurance for property damage 
                or casualty with respect to qualified residential 
                property (or the contents thereof), and
                    ``(B) which is funded only by the policyholder 
                placing with the insurance company a cash deposit (and 
                does not provide for any periodic premiums) and such 
                deposit is fully refundable (except for a penalty for 
                early withdrawal) upon cancellation of the policy.
        For purposes of the preceding sentence, the term `qualified 
        residential property' means any personal residence and any 
        building used for residential purposes with 10 or fewer 
        dwelling units.''
    (b) Conforming Amendment.--Paragraph (1) of section 7872(c) of such 
Code is amended by striking ``subsection (g)'' and inserting 
``subsections (g) and (h)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

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