I115th CONGRESS1st SessionH. R. 871IN THE HOUSE OF REPRESENTATIVESFebruary 6, 2017Mr. Smith of Missouri (for himself, Mr. Larson of Connecticut, and Mr. Royce of California) introduced the following bill; which was referred to the Committee on Ways and MeansA BILLTo amend the Internal Revenue Code of 1986 to exempt premiums paid on non-cash-value property and casualty insurance from the taxes to enforce reporting on certain foreign accounts.

1.

Exemption for premiums paid on non-cash-value property and casualty insurance from taxes to enforce reporting on certain foreign accounts

(a)

In general

Section 1473(1) of the Internal Revenue Code of 1986 is amended by redesignating subparagraph (C) as subparagraph (D) and by inserting after subparagraph (B) the following new subparagraph: (C)

Exception for premiums paid on non-cash-value property and casualty insurance

(i)

In general

Such term shall not include any premium paid for any insurance contract if— (I)such insurance contract does not have an aggregate cash value greater than zero, and (II)no portion of the reserves, unearned premiums, or unpaid losses, with respect to such contract are taken into account under paragraph (1) or (2) of section 816(a). (ii)

Cash value

The term cash value means any amount (determined without reduction for any charge or policy loan) that— (I)is payable under the contract to any person upon surrender, termination, cancellation, or withdrawal, or (II)can be borrowed by any person under, or with regard to, the contract (including by pledging as collateral). (iii)

Exceptions

Notwithstanding clause (ii), the term cash value shall not include any amount payable— (I)solely by reason of the death of an individual insured under a life insurance contract, (II)as a personal injury or sickness benefit or a benefit providing indemnification of an economic loss incurred upon the occurrence of the event insured against, (III)as a refund of a previously paid premium (less cost of insurance charges whether or not actually imposed) under an insurance contract (other than a life insurance contract) due to cancellation or termination of the contract, decrease in risk exposure during the effective period of the contract, or arising from the correction of a posting or similar error with regard to the premium for the contract, (IV)as a policyholder dividend (other than a termination dividend) provided that the dividend relates to an insurance contract under which the only benefits payable are described in subclause (II), or (V)as a return of an advance premium or premium deposit for an insurance contract for which the premium is payable at least annually if the amount of the advance premium or premium deposit does not exceed the next annual premium that will be payable under the contract.. (b)

Effective date

The amendments made by this section shall apply to payments made after the date of the enactment of this Act.