PUBLIC LAW 100-647—NOV. 10, 1988	102 STAT. 3509
(7)	Subsection (b) of section 953 of the 1986 Code is amended—
 (A)	by striking out paragraph (1) and redesignating para-
graphs (2), (3), and (4) as paragraphs (1), (2), and (3), respec-
tively,
 (B)	by striking out Subparagraph (A) of paragraph (1) (as
so redesignated) and inserting in lieu thereof the following:
"(A) The small life insurance company deduction.", and
(C)	by striking out "(other than those taken into account
under paragraph (3))" in paragraph (3) (as so redesignated).
(8)	Subparagraph (B) of section 953(cX3) of the 1986 Code is
amended—
 (A)	by striking out "related person insurance income"
and inserting in lieu thereof   related person insurance
income (determined on a gross basis)", and
 (B)	by striking out "its insurance income" and inserting
in lieu thereof "its insurance income (as so determined)".
(9)	Subclause (H) of section 953(cX3XCXi) of the 1986 Code is
amended—
 (A)	by striking out "all benefits" and inserting in lieu
thereof "all benefits (other than with respect to section
884)", and
 (B)	by striking out "tinder any income tax treaty" and
inserting in lieu thereof "granted by the United States
under any treaty".
(10)	Paragraph (7) of section 861(a) of the  1986 Code is
amended to read as follows:
"(7) Amounts received as nmderwriting income (as defined in
section 832(bX3)) derived from the issuing (or reinsuring) of any
insurance or annuity contract—
"(A) in connection with property in, liability arising out
of an activity in, or in connection with the lives or health of
residents of, the United States, or
"(B) in connection with risks not described in subpara-
graph (A) as a result of any arrangement whereby another
corporation receives a substantially equal amount of pre-
miums or other consideration in respect to issuing (or
reinsuring) any insurance or annuity contract in connection
with property in, liability arising out of activity in, or in
connection with the lives or health of residents of, the
United States."
 (11)	Subparagraph (A) of section 955(aX2) of the 1986 Code is
amended by striking out "beginning before 1987" and inserting
in lieu thereof "beginning before 1987 (to the extent such
amount exceeds the sum of the decreases in qualified invest-
ments determined under this paragraph for prior taxable years
beginning after 1986)".
 (12)	Paragraphs (6) and (7) of section 954(b) of the 1986 Code
are each amended by striking out "(determined without regard
to the exclusion under paragraph (2) of this subsection)".
(13XA) Subparagraph (C) of section 1221(gX3) of the Reform
Act is amended—	26 USC 954 note.
(i) by striking out "July 9" and inserting in lieu thereof
"June 9", and
(ii) by striking out "March 31,1982" and inserting in lieu
thereof "November 3,1981",
(B) Subparagraph (D) of section 1221(gX3) of the Reform Act is
amended—