REVENUE RULING 95-80
1995-2 C.B. 79

[IRS Annotation]
Accident and health insurance contracts. Under sections 807(d) and 816(e) of the Code, as added by section 211(a) of the Tax Reform Act of 1984, effective for taxable years beginning after December 31, 1983, the amount of the life insurance reserve for a guaranteed renewable accident and health contract is determined under a 2-year full preliminary term method. Rev. Rul. 71-367 obsoleted.

Rev. Rul. 95-80
Periodically, the Internal Revenue Service identifies certain revenue rulings that, although not specifically revoked or superseded, are obsolete because (1) the applicable statutory provisions or regulations have been changed or repealed; (2) the ruling position is specifically covered by statute, regulations, or subsequent published position; or (3) the facts set forth no longer exist or are not sufficiently described to permit clear application of the current statute and regulations.

[80]

Rev. Rul. 71-367, 1971-2 C.B. 258, concludes that an otherwise guaranteed renewable accident and health insurance contract is to be treated as a cancelable contract during the preliminary term because the amount of the reserve in addition to the reserve for unearned premiums (additional reserve) is zero during the preliminary term.

Section 211(a) of the Tax Reform Act of 1984, 1984-3 (Vol. 1) C.B. 1, 235, added section 807(d) to the Internal Revenue Code, effective for taxable years beginning after December 31, 1983. Section 807(d) provides that the amount of the life insurance reserve for a noncancellable accident and health insurance contract is determined by using a 2-year full preliminary term method. Under this method the amount of the additional reserve during the preliminary term is zero. Section 807(d) also applies to guaranteed renewable accident and health insurance contracts. See section 816(e). The addition of section 807(d) to the Code made Rev. Rul. 71-367 obsolete for taxable years beginning after December 31, 1983.

EFFECT ON OTHER REVENUE RULINGS
Rev. Rul. 71-367 is obsolete.