applicable home country risks
(ii)The term “applicable home country risks” means risks in connection with property in, liability arising out of activity in, or the lives or health of residents of, the home country of the qualifying insurance company or qualifying insurance company branch, as the case may be, issuing or reinsuring the contract covering the risks. (C)A contract issued by a qualifying insurance company or qualifying insurance company branch which covers risks other than applicable home country risks (as defined in subparagraph (B)(ii)) shall not be treated as an exempt contract unless such company or branch, as the case may be— (i)conducts substantial activity with respect to an insurance business in its home country, and (ii)performs in its home country substantially all of the activities necessary to give rise to the income generated by such contract.