To amend the Internal Revenue Code of 1986 with respect to the treatment of certain life insurance contracts.

Amends the Internal Revenue Code to provide for the treatment of decreases in future benefits under modified endowment life insurance contracts.

 
HR 3219 IH
101st CONGRESS
1st Session
 H. R. 3219
To amend the Internal Revenue Code of 1986 with respect to the treatment of
certain life insurance contracts.
IN THE HOUSE OF REPRESENTATIVES
September 6, 1989
Mrs. KENNELLY 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
certain life insurance contracts.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. TREATMENT OF CERTAIN DECREASES IN FUTURE BENEFITS.
  (a) GENERAL RULE- Paragraph (3) of section 7702A(c) of the Internal Revenue
  Code of 1986 (relating to treatment of material changes) is amended by
  adding at the end thereof the following new subparagraph:
  `(C) TREATMENT OF CERTAIN DECREASES IN FUTURE BENEFITS- For purposes of
  subparagraph (A), in the case of any contract which simultaneously insures
  more than one life and which provides for the payment of a substantial
  portion of the death benefit under the contract upon the death of the last
  life so insured, the term `material change' includes any decrease in future
  benefits under the contract after the 1st 7 contract years.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
  contracts entered into on or after June 21, 1988.