A bill to amend the Internal Revenue Code of 1954 to allow a business deduction for certain self-insurance reserves.

Amends the Internal Revenue Code to allow businesses an income tax deduction for self-insured losses. Limits the amount of such deduction for taxpayers maintaining a self-insurance trust to an amount equal to the value of total liability for self-insured losses per year minus the amount in the taxpayer's reserve account or self-insurance trust. Limits the amount of such deduction for taxpayers self-insuring through either an affiliated or unaffiliated insurer to an amount equal to the premium paid to the insurer.

Provides that payments made with respect to self-insured losses shall be deductible only to the extent of the aggregate of the contribution made to the self-insurance trust or reserve account for the year in which the losses were incurred. Requires an annual accounting of self-insured losses whether or not a deduction is taken for that year.

Includes in the gross income of the taxpayer any amount in a reserve account which exceeds any liability for self-insured losses.

Defines and sets requirements for a self-insurance trust. Defines "self-insured losses" as: (1) losses, to the extent not compensated by insurance (other than insurance provided by an affiliate insurance company) or otherwise; and (2) amounts paid to insurers unrelated to the taxpayer to the extent such amounts are not otherwise deductible as insurance expenses when the insurer assumes risks of the taxpayer's business and adjusts the taxpayer's premium subsequent to payment.