35 Miss. Code. R. 3-10-03-101 - DEDUCTIONS:

1. Insurance companies may deduct from gross income the deductions provided by statute on the same basis and the same measure as other corporations. Deductions shall be computed on an incurred basis except that, where taxpayer reports income on a receipts basis, deductions must be computed on a paid basis.

2. Amounts representing rebates, return premiums and premiums on policies not taken may be deducted from income when such amounts have been included in income in the current year or prior years. Dividends (other than dividends paid to stockholders as stock dividends) or distributions which represent a return of premiums paid, or deposited, by policy holders are deductible when actually paid to policy holders, or are definitely and irrevocably placed to the credit of policy holders subject to withdrawal on demand; or treated and consummated as a reduction of premiums due from policy holders. Dividends or distributions, which are credited to future premiums payable by policy holders, are not deductible from gross income when such dividends or distributions are not credited or paid to the prospective policy holder unless the policy is renewed. Deductible policy dividends on direct business and reinsurance assumed must be reduced by dividends on reinsurance ceded.

3. Foreign, non-life companies using the apportionment method of reporting income will determine underwriting income on a net basis. No other companies may deduct reinsurance ceded unless the assuming company is, or would be, required to report the income therefrom under the direct accounting method. Generally, this will permit domestic companies to deduct reinsurance ceded to Mississippi companies.

4. In computing losses and claims any estimate for losses incurred but not reported during the taxable year should not be included. As payments on policies, there shall be reported all death, disability and other policy claims paid within the year on Mississippi contracts, including fire, accident and liability losses, matured endowments, annuities, payments on installment policies and surrender values actually paid. All losses and claims paid must be reduced by recoveries from reinsurance ceded, when the reinsurance premiums paid have been taken as a deduction from gross income.

5. The statute provides that there may be deducted "the net additions required by law to be made within the taxable year to reserve funds when such reserve funds are maintained for the purpose of liquidating policies at maturity." Such deductible reserve additions do not include additions to a security reserve, investment reserve or any reserve other than those reserves normally included with and recognized as a part of the true policy reserves.

6. Said additions must reflect reinsurance to the extent that same is reflected in premium income reported. Life companies which do not include in gross income the increase in deferred and uncollected premiums must reduce the net increase in reserves by the increase in net deferred and uncollected premiums.

7. When Mississippi unearned premiums cannot be accounted for specifically by companies which use the direct accounting method of reporting, said premiums shall be computed by taking the ratios on a net basis between company-wide unearned premiums and company-wide net premiums written, by line of business and applying said ratios to the premium income reported, less return premiums, by line of business.

Notes

35 Miss. Code. R. 3-10-03-101