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TITLE 26-INTERNAL REVENUE CODE panies other than life or marine and redesignated subsec. (if) as subsec. (e). Subsec. i). Pub. L. 89-809 redesignated subsec. (g) as subsec. (f). Former subsec. (if) redesignated as subsec. (e). 1964-Subsec. (d)(2). Pub. L. 88-272 provided that for taxable years beginning after Dec. 31, 1962, no ac- crual of discount shall be required under par. (2) on any bond. 1962-Pub. L. 87-834, § 8(b)(1), substituted "Determi- nation of taxable investment income" for "Determina. tion of mutual insurance company taxable income" in the section catchline, Subsec. (a). Pub. L. 87-834, §8(b)(1), defined "tax- able investment income" and "investment loss" for purposes of this part, and eliminated provisions which defined "mutual insurance company taxable income" for purposes of section 821 of this title, which provi- sions are now contained in section 821(b) of this title. Subsec. (c). Pub. L. 87-834, § 8(b)(2), (3), substituted "taxable investment income" for "mutual insurance company taxable income" in the opening provisions and in pars. (2) and (6)(A), and inserted sentence in par. (7) providing that in applying section 246(b) (re- lating to limitations on aggregate amount of deduc- tions for dividends received) for purposes of par. (7), the reference in such section to "taxable income" shall be treated as a reference to "taxable investment income". Subsec. (e). Pub. L. 87-834, § 8(b)(2), substituted "taxable investment income" for "mutual insurance company taxable income". Subsec. (f). Pub. L. 87-834, § 8(b)(4), added subsec. (f). Provisions of subsec. (f) were formerly contained in section 823 of this title. 1956-Subsec. (b. Act Mar. 13, 1956, § 3(a)(3), princi- pally included royalties, and the income from a trade or business other than the insurance business carried on by the insurance company in "gross investment Income". Subsec. (c). Act Mar. 13, 1956, § 3(a)(4), (5), (6), clari- fied the deduction for real estate expenses in par. (3), substituted in par. (6) "the sum of the items described in subsection (b) (other than paragraph (1)(D) there- of) and net premiums received. In the application of section 1212" for "the sum of interest, dividends, rents, and net premiums received. In the application of section 1211". and inserted pars. (8) and (9). Subsec. (d)(1). Act Mar. 13, 1956, § 3(a)(7), substitut- ed "subsection (c)(3) or (4)" for "subsection (e)(3) or (4)". Subsee. (e). Act Mar. 13, 1956, § 3(a)(8), substituted "items described in subsection (b) (other than para- graph (1)(D) thereof" for "interest, dividends, rents,". EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsecs. (c)(2), (5). (6)(A), (7). (d)(2), by section 1901(a)(105), (b)(1)(P) to (S) of Pub. L. 94- 455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under sec- tion 2 of this title. EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89-809 applicable with re- spect to taxable years beginning after Dec. 31, 1966, see section 104(n) of Pub. L. 89-809, set out as an Ef- fective Date of 1966 Amendment note under section 11 of this title. EFFECTIVE DATE OF 1962 AMENDMENT Amendment of subsecs, (a), (c) and (e) and addition of subsec. (f) by Pub. L, 87-834 applicable with respect to taxable years beginning after Dec. 31, 1962, see sec- tion 8(h) of Pub. L, 87-834, set out as an Effective Date of 1962 Amendment note under section 821 of this title. EFFECTIVE DATE OF 1956 AMENDMENT Amendment to subsecs. (b), (c), (d)(1), and (e), by act Mar. 13, 1956 applicable only to taxable years begin- ning after Dec. 31, 1954, see section 6 of act Mar. 13, 1956, set out as an Effective Date of 1956 Amendment note set out under section 821 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 501, 821. 832, 841 of this title. § 823. Determination of statutory underwriting income or loss (a) In general For purposes of this part- (1) The term "statutory underwriting income" means the amount by which- (A) the gross income which would be taken into account in computing taxable income under section 832 if the taxpayer were subject to the tax imposed by section 831, reduced by the gross investment income, exceeds (B) the sum of (I) the deductions which would be taken into account in computing taxable income if the taxpayer were subject to the tax imposed by section 831, reduced by the deductions provided in section 822(c), plus (it) the deductions provided in subsection (c) and section 824(a). (2) The term "statutory underwriting loss" means the excess of the amount referred to in paragraph (1)(B) over the amount referred to in paragraph (1)(A). (M) Modifications In applying subsection (a)- (1) Net operating loss deduction Except as provided by section 844, the de- duction for net operating losses provided in section 172 shall not be allowed. (2) Interinsurers In the case of a mutual insurance company which is an interinsurer or reciprocal under- writer- (A) there shall be allowed as a deduction the increase for the taxable year in savings credited to subscriber accounts, or (B) there shall be included as an item of gross income the decrease for the taxable year in savings credited to subscriber ac- counts. For purposes of the preceding sentence, the term "savings credited to subscriber ac- counts" means such portion of the surplus as is credited to the Individual accounts of sub- scribers before the 16th day of the third month following the close of the taxable year, but only if the company would be obli- gated to pay such amount promptly to such subscriber if he terminated his contract at the close of the company's taxable year. For purposes of determining his taxable income, the subscriber shall treat any such savings credited to his account as a dividend paid or declared. (c) Special deduction for small company having gross amount of less than $1,100,000 (1) In general If the gross amount received during the tax- able year by a taxpayer subject to the tax im- posed by section 821(a) from the items de- scribed in section 822(b) (other than para- graph (1)(D) thereof) and premiums (includ- Page 525 § 823