Harco Holdings, Incorporated, and Subsidiaries v. United States

CUDAHY, Circuit Judge.

Life insurance companies receive favorable treatment under the Internal Revenue Code. To qualify for such favorable treatment, an insurance company must meet statutory criteria that measure how much of the company’s business is life insurance. In 1978, the tax year in question, the qualification test was codified at 26 U.S.C. § 801 (1978 Supp.). 1 We are called upon to interpret a small portion of the statute and to decide whether accrued unpaid losses should be taken into account when determining whether an insurance company is a life insurance company.

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Harco Holdings,…