Par. 2. Section 1.801-4 is amended by adding a new paragraph (g) to read as follows:
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(g) Recomputation of life insurance reserves--(1) General. If an insurance company does not compute or estimate its reserves for contracts involving, at the time with respect to which the reserves are computed, life, accident or health contingencies, on the basis of mortality or morbidity tables and assumed rates of interest, then the taxpayer or the Commissioner may recompute reserves for those contracts on the basis of mortality or morbidity tables and assumed rates of interest.
(2) Effect of recomputation. If reserves are recomputed pursuant to paragraph (g)(1) of this section, the recomputed reserves satisfy the requirements of section 816(b)(1)(A).
(3) Mean reserve. For purposes of section 816(b)(4) and Sec. 1.801- 3(i), if reserves are recomputed pursuant to paragraph (g)(1) of this section for a taxable year, the reserves must be recomputed for both the beginning and the end of the taxable year.
(4) Subsequently acquired information. No information acquired after the date as of which a reserve was initially computed or estimated may be taken into account in recomputing that reserve under paragraph (g)(1) of this section.
(5) Effective date. This section is applicable with respect to returns filed for taxable years beginning after the date final regulations are filed with the Office of the Federal Register. Michael P. Dolan, Acting Commissioner of Internal Revenue.