To amend the Internal Revenue Code of 1986 with respect to the treatment of effectively connected investment income of insurance companies.

Amends the Internal Revenue Code to revise provisions determining the effectively connected net investment income of foreign companies carrying on insurance business in the United States. Requires such companies to recompute their effectively connected net investment income for taxable years beginning after December 31, 1997. Provides for increases (or decreases, as appropriate) in such income where the recomputed amount exceeds (or is less than) the income for the recomputed year. Requires payment (or receipt) of interest on the underpayment (or overpayment) of adjusted amounts.