26 U.S. Code § 817 - Treatment of variable contracts
A pension plan contract which is not a life, accident, or health, property, casualty, or liability insurance contract shall be treated as a contract which provides for the payments of annuities for purposes of subsection (d).
For purposes of subsection (b)(1)(A) of section 816, the reflection of the investment return and the market value of the segregated asset account shall be considered an assumed rate of interest.
For purposes of subchapter L, section 72 (relating to annuities), and section 7702(a) (relating to definition of life insurance contract), a variable contract (other than a pension plan contract) which is otherwise described in this section and which is based on a segregated asset account shall not be treated as an annuity, endowment, or life insurance contract for any period (and any subsequent period) for which the investments made by such account are not, in accordance with regulations prescribed by the Secretary, adequately diversified.
To the extent that any segregated asset account with respect to a variable life insurance contract is invested in securities issued by the United States Treasury, the investments made by such account shall be treated as adequately diversified for purposes of paragraph (1).
Nothing in this subsection shall be construed as prohibiting the use of independent investment advisors.
A prior section 817, added Pub. L. 86–69, § 2(a), June 25, 1959, 73 Stat. 132; amended Pub. L. 94–455, title XIV, § 1402(b)(1)(M), (2), title XIX, §§ 1901(a)(100), 1951(b)(11)(A), Oct. 4, 1976, 90 Stat. 1732, 1781, 1839, related to rules regarding certain gains and losses, prior to the general revision of this part by Pub. L. 98–369, § 211(a).
Another prior section 817, act Aug. 16, 1954, ch. 736, § 817, as added Mar. 13, 1956, ch. 83, § 2, 70 Stat. 46, related to denial of double deductions, prior to the general revision of this part by Pub. L. 86–69, § 2(a).
2004—Subsec. (c). Pub. L. 108–218, in introductory provisions, struck out “(other than section 809)” after “For purposes of this part”.
1997—Subsec. (h)(2)(A). Pub. L. 105–34, § 1271(b)(8)(A), substituted “851(b)(3)” for “851(b)(4)”.
Subsec. (h)(2)(B). Pub. L. 105–34, § 1271(b)(8)(B), substituted “851(b)(3)(A)(i)” for “851(b)(4)(A)(i)”.
1996—Subsec. (d)(2)(C). Pub. L. 104–188, § 1611(a)(1), added subpar. (C).
Subsec. (d)(3)(C). Pub. L. 104–188, § 1611(a)(2), added subpar. (C).
1988—Subsec. (h)(6). Pub. L. 100–647 added par. (6).
1986—Subsec. (d). Pub. L. 99–514, § 1821(t)(1), inserted at end “Paragraph (3) shall be applied without regard to whether there is a guarantee, and obligations under such guarantee which exceed obligations under the contract without regard to such guarantee shall be accounted for as part of the company’s general account.”
Subsec. (h)(1). Pub. L. 99–514, § 1821(m)(2), struck out last sentence which read as follows: “For purposes of this paragraph and paragraph (2), beneficial interests in a regulated investment company or in a trust shall not be treated as 1 investment if all of the beneficial interests in such company or trust are held by 1 or more segregated asset accounts of 1 or more insurance companies.”
Subsec. (h)(3) to (5). Pub. L. 99–514, § 1821(m)(1), added pars. (3) and (4), redesignated former par. (4) as (5), and struck out former par. (3) which read as follows: “In the case of a segregated asset account with respect to variable life insurance contracts, paragraph (1) shall not apply in the case of securities issued by the United States Treasury which are owned by a regulated investment company or by a trust all the beneficial interests in which are held by 1 or more segregated asset accounts of the company issuing the contract.”
Amendment by section 1821(m) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.