Form 1120-L U.S. Life Insurance Company Income Tax Return

Form

For calendar year 2006 or tax year beginning
, 2006, ending
© See separate instructions.

Department of the Treasury
Internal Revenue Service

A Check if:
1 Consolidated return
(attach Form 851)
2 Nonlife insurance
companies are
included
3 Schedule M-3 required
(attach Sch. M-3)

Deductions (See instructions for limitations on deductions.)

Income

E Check if:

(1)

Please
print
or
type

Final return

2006

, 20

Name

B

Employer identification number

Number, street, and room or suite no. If a P.O. box, see instructions.

C

Date incorporated

City or town, state, and ZIP code

D

Check applicable box if an election
has been made under section(s):

(2)

Name change

(3)

Address change

(4)

Amended return

953(c)(3)(C)

1

Gross premiums, etc., less return premiums, etc. Enter balance

1

2

Net decrease, if any, in reserves (see instructions)

2

3

10% of any decrease in reserves under section 807(f)(1)(B)(ii)

3

4

Investment income (Schedule B, line 8) (see instructions)

4

5

Net capital gain (Schedule D (Form 1120), line 13)

5

6
7
8

Income from a special loss discount account (attach Form 8816)
Other income (attach schedule)
Life insurance company gross income. Add lines 1 through 7

6

9

Death benefits, etc.

9

10
11

Net increase, if any, in reserves (Schedule F, line 35)

10

10% of any increase in reserves under section 807(f)(1)(B)(i)

11

12

Deductible policyholder dividends (Schedule F, line 18e)

12

13

Assumption by another person of liabilities under insurance, etc., contracts

13

14

Dividends reimbursable by taxpayer

8

14
c Bal

©

15c
16

17

Additional deduction (attach Form 8816)

17

18

Other deductions (see instructions) (attach schedule)

19
20

Add lines 9 through 18

18
19
20

Subtotal. Subtract line 19 from line 8

21a Dividends-received deduction (Schedule A, line 16, column (c))
Plus: b Operations loss deduction (see instructions) (attach schedule)

21a

22

Gain or (loss) from operations. Subtract line 21c from line 20

21c
22

23

Small life insurance company deduction (Schedule H, line 17)

23

24
25
26

Life insurance company taxable income (LICTI). Subtract line 23 from line 22
Limitation on noninsurance losses (Schedule I, line 9)
Amount subtracted from policyholders surplus account (Schedule J, Part I, line 3)

24

27

Taxable income. Add lines 24, 25, and 26 (see instructions)

27

28

Total tax (Schedule K, line 10)

28
29b

c 2006 estimated tax payments

29c

25
26

29d
) 29f
29g

d 2006 special estimated tax payments (Do not include on line 29f)
29e (
e Less 2006 refund applied for on Form 4466
g Tax deposited with Form 7004
i
ij

21b

29a

b Prior year(s) special estimated tax payments to be applied

h Credits: (1) Form 2439

29h

(2) Form 4136

29i
29j

Credit for federal telephone excise tax paid (attach Form 8913)
U.S. income tax paid or withheld at source (attach Form 1042-S)

29k
30

©

30

Estimated tax penalty. Check if Form 2220 is attached

31
32
33

Amount owed. If line 29k is smaller than the total of lines 28 and 30, enter amount owed
Overpayment. If line 29k is larger than the total of lines 28 and 30, enter amount overpaid
Enter amount from line 32: Credited to 2007 estimated tax ©
Refunded

Sign
Here

953(d)

7

b Less tax-exempt interest expense
15a Interest ©
16 Deductible policy acquisition expenses (Schedule G, line 20)

29a 2005 overpayment credited to 2006

Tax and Payments

OMB No. 1545-0128

U.S. Life Insurance Company Income Tax Return

1120-L

©

31
32
33

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true,
correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

©

Paid
Preparer’s
Use Only

Signature of officer
Preparer’s
signature

©

Firm’s name (or
yours if self-employed),
address, and ZIP code

Date

©

May the IRS discuss this return with
the preparer shown below (see
Yes
No
instructions)?

Title
Date

©

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.

Preparer’s SSN or PTIN

Check if
self-employed
EIN
Phone no.
Cat. No. 11480E

(

)
Form

1120-L

(2006)

Form 1120-L (2006)

Page

Dividends subject to proration
1

(a) Dividends received

(c) Deduction
((a) times (b))

(b) %

Domestic corporations, less-than-20%-owned (other than debtfinanced stock)

1

Domestic corporations, 20%-or-more-owned (other than debtfinanced stock)

2

80

3
4

Debt-financed stock of domestic and foreign corporations

3

see instructions

Public utility corporations, less-than-20%-owned

4

5

Public utility corporations, 20%-or-more-owned

5

6
7

Foreign corporations, less-than-20%-owned, and certain FSCs
Foreign corporations, 20%-or-more-owned, and certain FSCs

6

8
9

Wholly owned foreign subsidiaries (section 245(b)) and certain FSCs

8

42
48
70
80
100
100

2

2

Dividend Income and Dividends-Received Deduction (see instructions)

Schedule A

70

7

Certain affiliated company dividends

9

10

Gross dividends-received deduction. Add lines 1 through 9

10

11
12

Company share percentage (Schedule F, line 32)
Prorated amount. Line 10 times line 11

11
12

Dividends not subject to proration
13

Affiliated company dividends

13

14
15

Other corporate dividends

14

Total dividends. Add lines 1 through 14, column (a). Enter here
and on Schedule B, line 2

15

16

Total deductions. Add lines 12 and 13, column (c). Reduce the
deduction as provided in section 805(a)(4)(D)(ii). Enter here and
on page 1, line 21a and on Schedule J, Part II, line 8c

16

Schedule B

see instructions

Gross Investment Income (section 812(d)) (see instructions)

1

Interest (excluding tax-exempt interest)

1

2

Gross taxable dividends (Schedule A, line 15, column (a))

2

3

Gross rents

3

4

Gross royalties

4

5

Leases, terminations, etc.

5

6

Excess of net short-term capital gain over net long-term capital loss (Schedule D (Form 1120), line 12)

6

7

Gross income from trade or business other than an insurance business (attach schedule)

7

8

Investment income. Add lines 1 through 7. Enter here and on page 1, line 4

8

9

Tax-exempt interest. Enter here and on Schedule F, line 13 and Schedule J, Part II, line 8d

9

10
11
12
13

Increase in policy cash value of section 264(f) policies as defined in section 805(a)(4)(F). Enter here and
include on Schedule F, line 13
Add lines 8, 9, and 10
100% qualifying dividends
Gross investment income. Subtract line 12 from line 11. Enter here and on Schedule F, line 9

10
11
12
13
Form

1120-L

(2006)

Form 1120-L (2006)

Schedule F

Page 3
Increase (Decrease) in Reserves (section 807) and Company/Policyholder Share Percentage
(section 812) (see instructions)
(a) Beginning of tax year

1
2

Life insurance reserves
Unearned premiums and unpaid losses

1

3

Supplementary contracts

3

4
5

Dividend accumulations and other amounts
Advance premiums

4

6

Special contingency reserves

6

7

Add lines 1 through 6

7

8

Increase (decrease) in reserves under section 807. Subtract line 7, column (a) from line 7, column (b)

8

9

Gross investment income (Schedule B, line 13)

9

10a Required interest on reserves under sections 807(c)(1), (3), (4), (5), and (6)
(attach schedule)
b Deductible excess interest. Enter here and on lines 18b and 19 below

2

5

10a
10b

c Deductible amounts credited to employee pension funds

10c

d Deductible amounts credited to deferred annuities

10d

e Deductible interest on amounts left on deposit

10e

f

10f

Total policy interest. Add lines 10a through 10e. Enter here and on line 26 below

11

11

Subtract line 10f from line 9

12

Life insurance company gross income (see instructions)

12

13

Tax-exempt interest and the increase in policy cash value of section 264(f) policies
as defined in section 805(a)(4)(F). (Enter the sum of Schedule B, line 9 and line 10.)

13

14

Add lines 12 and 13

14

15
16

Increase in reserves from line 8. (If a decrease in reserves, enter -0-.)

15

Subtract line 15 from line 14

16

17

Investment income ratio. Divide line 11 by line 16

18a Policyholder dividends paid or accrued
b Excess interest from line 10b
c Premium adjustments
d Experience-rated refunds

17
18a
18b
18c
18d

e Deductible policyholder dividends. Add lines 18a through 18d. Enter here and on page 1, line 12

18e

19

Deductible excess interest from line 10b

19

20

Deductible dividends on employee pension funds

20

21
22

Deductible dividends on deferred annuities

21

Deductible premium and mortality charges for contracts paying excess interest

22

23

Add lines 19 through 22

24

Subtract line 23 from line 18e

23
24

25

Investment portion of dividends. Line 17 times line 24

25

26

Policy interest from line 10f

26

27

Policyholder share amount. Add lines 25 and 26

28

Net investment income (see instructions)

27
28

29
30

Policyholder share amount from line 27
Company share of net investment income. Subtract line 29 from line 28

29

31

Total share percentage

31

32
33

Company share percentage. Divide line 30 by line 28. Enter here and on Schedule A, line 11
Policyholders’ share percentage. Subtract line 32 from line 31

32

34

Policyholders’ share of tax-exempt interest and the increase in policy cash value of section 264(f) policies
as defined in section 805(a)(4)(F). Multiply line 13 by line 33

34

Net increase (decrease) in reserves. Subtract line 34 from line 8. If an increase, enter here and on page
1, line 10. If a (decrease), enter here and on page 1, line 2

35

35

(b) End of tax year

30

100%
%
%

33

Form

1120-L

(2006)

Form 1120-L (2006)

Schedule G

Page

(b) Group life
insurance

(a) Annuity
1

Gross premiums and other consideration

1

2

Return premiums and premiums and other consideration incurred for
reinsurance

2

Net premiums. Subtract line 2 from line 1
Net premium percentage

3

5

Multiply line 3 by line 4

5

6

Combine line 5, columns (a), (b), and (c), and enter here. If zero or less, enter -0- on lines 7 and 8

6

7

Unused balance of negative capitalization amount from prior years

7

8

Combine lines 6 and 7. If zero or less, enter -0-

8

9

General deductions (attach schedule)

9

10

Enter the lesser of line 8 or line 9

11

Deductible general deductions. Subtract line 10 from line 9. Enter here and include on page 1, line 18

10
11

12

If the amount on line 6 is negative, enter it as a positive amount. If the amount on line 6 is positive, enter -0-

12

13

Unamortized specified policy acquisition expenses from prior years

13

14

Deductible negative capitalization amount. Enter the lesser of line 12 or line 13

14

3
4

4

1.75%

15a Tentative 60-month specified policy acquisition expenses. Enter amount from line 10, but
not more than $5 million
b Limitation
16

Phase-out amount. Subtract line 15b from line 10. If zero or less, enter -0-

17a Current year 60-month specified policy acquisition expenses. Subtract line 16 from line 15a.
If zero or less, enter -0-

7.7%

(

)

15a
15b

$10,000,000

16
17a
17b
18a

b Enter 5% of line 18a

20

(c) Other

2.05%

b Enter 10% of line 17a
18a Current year 120-month specified policy acquisition expenses. Subtract line 17a from
line 10

19

4

Policy Acquisition Expenses (section 848) (see instructions)

18b

Enter the applicable amount of amortization from specified policy acquisition expenses capitalized in prior years
and deductible this year. Attach schedule

19

Deductible policy acquisition expenses. Add lines 14, 17b, 18b, and 19. Enter here and on page 1, line 16

20
Form

1120-L

(2006)

Form 1120-L (2006)

Schedule H

Page

5

Small Life Insurance Company Deduction (section 806(a)) (see instructions)
Part I—Controlled Group Information
Tentative LICTI
Name of company

(a) Income

(b) (Loss)

1
2
3
4
5
6

Add lines 1 through 5 in both columns

7

Net controlled group tentative LICTI. Subtract line 6, column (b) from line 6, column (a).
Enter here and on line 11 below

Part II—Small Life Insurance Company Deduction If total assets (Schedule L, Part I, line 6, column (b)), are $500
million or more, complete lines 8 through 12, line 16, and enter -0- on line 17 (see instructions).
8

Gain or (loss) from operations from page 1, line 22

9a Noninsurance income
b Noninsurance deductions
10a Gain or (loss) on insurance operations. Subtract line 9a from line 8 and add
line 9b
b Adjustments (attach schedule)
c Tentative LICTI. Combine lines 10a and 10b

8
9a
9b
10a
10b
10c

11

Net controlled group tentative LICTI from line 7

11

12

Combined tentative LICTI. Add line 10c and line 11. If $15 million or more, skip
lines 13 through 15 and enter -0- on line 17 below and on page 1, line 23

12

13

Enter 60% of line 12, but not more than $1,800,000

14a Maximum statutory amount
b Subtract line 14a from line 12. If zero or less, enter -0-

13
14a

$3,000,000

14b

c Enter 15% of line 14b, but not more than $1,800,000
15

Tentative small life insurance company deduction. Subtract line 14c from line 13

16

Taxpayer’s share. Divide line 10c by the total of line 6, column (a) and line 10c. If line 10c is zero or less,
enter -0- on this line
Small life insurance company deduction. Multiply line 15 by line 16. Enter here and on page 1, line 23,
and on Schedule J, Part II, line 8b

17

Schedule I

14c
15
16
17

Limitation on Noninsurance Losses (section 806(b)(3)(C)) (see instructions)

1

Noninsurance income (attach schedule)

1

2

Noninsurance deductions (attach schedule)

2

3

Noninsurance operations loss deductions

3

4

Add lines 2 and 3

4

5

Noninsurance loss. Subtract line 1 from line 4. If line 1 is greater than line 4, skip lines 5 through 8 and enter
-0- on line 9

5

6

Enter 35% of line 5

6

7

Enter 35% of the excess of LICTI (page 1, line 24) over any noninsurance loss included on page 1

7

8

Enter the lesser of line 6 or line 7

8

9

Limitation on noninsurance losses. Subtract line 8 from line 5. Enter here and on page 1, line 25

9
Form

1120-L

(2006)

Form 1120-L (2006)

Page

6

Schedule J Part I—Policyholders Surplus Account (Stock Companies Only) (section 815(d)) (see instructions)
1

1

Balance at the beginning of the tax year

2a Subtractions from account under pre-1984 sections 815(d)(1) and (4)

2a

b Tax increase on line 2a

2b

c Subtraction from account under pre-1984 section 815(d)(2)

2c

3

Add lines 2a through 2c, but not more than line 1. Enter here and on page 1, line 26

3

4
5
6

Subtract line 3 from line 1
Direct or indirect distributions, but not more than line 4
Balance at the end of the tax year. Subtract line 5 from line 4

4
5
6

Part II—Shareholders Surplus Account (Stock Companies Only) (section 815(c)) (see instructions)
7a

7a Balance at the beginning of the tax year
b Transfers under pre-1984 sections 815(d)(1) and (4) for the preceding year

7b

c Balance at the beginning of the tax year. Add lines 7a and 7b

7c
8a

8a LICTI. Add lines 24 and 25, page 1. If zero or less, enter -0-

8b

b Small life insurance company deduction (Schedule H, line 17)

8c

c Dividends-received deduction (Schedule A, line 16, column (c))

8d

d Tax-exempt interest (Schedule B, line 9) (see instructions)
9 Add lines 7c through 8d

9

10

Tax liability without regard to section 815. Figure the tax on line 8a as if it were total taxable income

10

11
12
13

Subtract line 10 from line 9. If zero or less, enter -0Direct or indirect distributions in excess of the amount on line 5 in Part I above, but not more than line 11
Balance at the end of the tax year. Subtract line 12 from line 11

11

Schedule K

12
13

Tax Computation (see instructions)
©

1

Check if the corporation is a member of a controlled group (attach Schedule O (Form 1120))

2

Income tax

2

3

Alternative minimum tax (attach Form 4626)

3

4

Add lines 2 and 3

4
5a

5a Foreign tax credit (attach Form 1118)

5b

b Qualified electric vehicle credit (attach Form 8834)
c General business credit. Check applicable box(es):

Form 3800

d Credit for prior year minimum tax (attach Form 8827)

5c
5d

e Bond credits from:

5e

Form 6478

Form 8835, Section B
Form 8860

Form 8912

Form 8844

6

6

Total credits. Add lines 5a through 5e

7

Subtract line 6 from line 4

7

8

Foreign corporations—tax on income not effectively connected with U.S. business

8

Other taxes. Check if from:
Form 4255
Form 8611
Other (attach schedule)
Total tax. Add lines 7 through 9. Enter here and on page 1, line 28

10

9
10

9

Form

1120-L

(2006)

Form 1120-L (2006)

Schedule L

Page

7

Part I—Total Assets (section 806(a)(3)(C)) (see instructions)
(a) Beginning of tax year

1

Real property

1

2

Stocks

2

3

Proportionate share of partnership and trust assets

3

4

Other assets (attach schedule)

4

5

Total assets of controlled groups

5

6

Total assets. Add lines 1 through 5

6

(b) End of tax year

Part II—Total Assets and Total Insurance Liabilities (section 842(b)(2)(B)(i)) (see instructions)
Line references below are to the “Assets” (lines 1 and 2) and “Liabilities, Surplus, and Other Funds” (lines 3 through 13) sections of the NAIC
Annual Statement.
(a) Beginning of tax year

1

Subtotals for assets (line 24)

1

2

Total assets (line 26)

2

3

Reserve for life policies and contracts (line 1)

3

4

Reserve for accident and health policies (line 2)

4

5

Liability for deposit-type contracts (line 3)

5

6

Life policy and contract claims (line 4.1)

6

7

Accident and health policy and contract claims (line 4.2)

7

8

Policyholder’s dividend and coupon accumulations (line 5)

8

9

Premiums and annuity considerations received in advance less discount (line 8)

9

10

Surrender values on canceled policies (line 9.1)

10

11

Part of other amounts payable on reinsurance assumed (line 9.3)

11

12

Part of aggregate write-ins for liabilities (line 25). (Only include items or amounts
includable in “total insurance liabilities on U.S. business” as defined in section
842(b)(2)(B)(i))

12

13

Separate accounts statement (line 27)

13

14

Total insurance liabilities. Add lines 3 through 13

14

(b) End of tax year

Form

1120-L

(2006)

Form 1120-L (2006)

Schedule M
1

Page

Check method of accounting:
Accrual
a
b
Other (specify)

2

Yes

No

8

At any time during the year, did one foreign person
own, directly or indirectly, at least 25% of
(a) the total voting power of all classes of stock of
the corporation entitled to vote or (b) the total value
of all classes of stock of the corporation?

Check if the corporation is a:
a

Legal reserve company—if checked:
Kind of company:
(1)

Stock

8

Other Information (see instructions)

(2)

If “Yes,” Enter: a Percentage owned
and b Owner’s country ©

Mutual

Yes

No

©

Principal business:

3

(1)

Life insurance

(2)

Health and accident insurance

b

Fraternal or assessment association

c

Burial or other insurance company
Enter the percentage that the total of the
corporation’s life insurance reserves (section 816(b))
plus unearned premiums and unpaid losses (whether
or not ascertained) on noncancelable life, health or
accident policies not included in life insurance
reserves bears to the corporation’s total reserves
%.
(section 816(c))
Attach a schedule of the computation.

4

Does the corporation have any variable annuity
contracts outstanding?

5

At the end of the tax year, did the corporation own,
directly or indirectly, 50% or more of the voting stock
of a domestic corporation? (For rules of attribution,
see section 267(c).)
If “Yes,” attach a schedule showing (a) name and
employer identification number (EIN), (b) percentage
owned, and (c) taxable income or (loss) before NOL
and special deductions of such corporation for the
tax year ending with or within your tax year.

6

c The corporation may have to file Form 5472,
Information Return of a 25% Foreign-Owned U.S.
Corporation or a Foreign Corporation Engaged in a
U.S. Trade or Business. Enter number of Forms 5472
attached ©
9

Has the corporation elected to use its own payout
pattern for discounting unpaid losses and unpaid
loss adjustment expenses?

10

Does the corporation discount any of the loss
reserves shown on its annual statement?

11a

Enter the total unpaid losses shown on the
corporation’s annual statement:
(1) For the current year: $
(2) For the previous year: $

b

Enter the total unpaid loss adjustment expenses
shown on the corporation’s annual statement:
(1) For the current year: $
(2) For the previous year: $

12

Is the corporation a subsidiary in an affiliated group
or a parent-subsidiary controlled group?

If the corporation is filing a consolidated return, the
statement required by Regulations section
1.1502-21(b)(3) must be attached or the election will
not be valid.

If “Yes,” enter name and EIN of the parent
corporation. ©
7

At the end of the tax year, did any individual,
partnership, corporation, estate, or trust own,
directly or indirectly, 50% or more of the
corporation’s voting stock? (For rules of attribution,
see section 267(c).) If “Yes,” complete a and b below.

If the corporation has an operations loss deduction
(OLD) for the tax year and is electing under section
810(b)(3) to forego the carryback period, check
©
here

13

Enter the available OLD carryover from prior tax
years. (Do not reduce it by any deduction on page
1, line 21b.) © $

a Attach a schedule showing name and identifying
number. (Do not include any information already
entered in 6 above.)
b Enter percentage owned

©

Note. If the corporation, at any time during the tax year, had assets or operated a business in a foreign country or U.S. possession, it may be
required to attach Schedule N (Form 1120), Foreign Operations of U.S. Corporations, to this return. See Schedule N for more details.
Form

Printed on recycled paper

1120-L

(2006)