26 CFR 1.953-1 - Income from insurance of United States risks.
(a)In general. The subpart F income of a controlled foreign corporation for any taxable year includes its income derived from the insurance of United States risks for such taxable year. See section 952(a)(1). A controlled foreign corporation shall have income derived from the insurance of United States risks for such purpose of it has taxable income, as determined under § 1.953-4 or § 1.953-5, which is attributable to the reinsuring or the issuing of any insurance or annuity contract in connection with United States risks, as defined in § 1.953-2 or § 1.953-3, and if it satisfies the 5-percent minimum premium requirement prescribed in paragraph (b) of this section. It is immaterial for purposes of this section whether the person insured or the beneficiary of any insurance, annuity, or reinsurance contract is, as to such corporation, a related person or a United States shareholder. For definition of the term “controlled foreign corporation” for purposes of taking into account income derived from the insurance of United States risks under section 953, see section 957 (a) and (b) and §§ 1.957-1 and 1.957-2.
(b)5-percent minimum premium requirement. A controlled foreign corporation shall not have income derived from the insurance of United States risks for purposes of this section unless the premiums received by such corporation during the taxable year which are attributable to the reinsuring and the issuing of insurance and annuity contracts in connection with the United States risks exceed 5 percent of the total premiums which are received by such corporation during such taxable year and which are attributable to the reinsuring and the issuing of insurance and annuity contracts in connection with all risks.
(1)Reinsurance, etc. The terms “reinsurance”, “insurance”, and “annuity contract” have the same meaning which they have for purposes of applying section 809(c)(1) or section 832(b)(4), as the case may be.
(2)Premiums. The term “premiums” means the items taken into account for the taxable year under section 809(c)(1), or the amount computed for the taxable year under section 832(b)(4) without the application of subparagraph (B) thereof, as the case may be; except that, for purposes of determining the amount of premiums received in applying paragraph (b) of this section or paragraph (a) of § 1.953-3, advance premiums and deposits shall not be taken into account.
(5)Policy period. With respect to any insurance or annuity contract under which a corporation is potentially liable at any time during its taxable year, the term “policy period” means with respect to such year each period of coverage under the contract if such period begins or ends with or within the taxable year, except that, if such period of coverage is more than one year, such term means such of the following periods as are applicable, each one of which is a policy period with respect to the taxable year:
(iii) The period of less than one year if such period begins with an anniversary of the contract, ends with the date on which coverage under the contract terminates, and begins or ends with or within the taxable year.
(6)Foreign country. The term “foreign country” includes, where not otherwise expressly provided, a possession of the United States.
- 26 CFR 1.964-3 — Records to Be Provided by United States Shareholders.
- 26 CFR 1.952-1 — Subpart F Income Defined.
- 26 CFR 1.964-4 — Verification of Certain Classes of Income.
- 26 CFR 1.953-3 — Risks Deemed to Be United States Risks.
- 26 CFR 1.953-6 — Relationship of Sections 953 and 954.
- 26 CFR 1.957-2 — Controlled Foreign Corporation Deriving Income From Insurance of United States Risks.
- 26 CFR 1.953-4 — Taxable Income to Which Section 953 Applies.
- 26 CFR 1.953-1 — Income From Insurance of United States Risks.
- 26 CFR 1.953-2 — Actual United States Risks.
- 26 CFR 1.953-5 — Corporations Not Qualifying as Insurance Companies.