Chuck Grassley: “the bill imposes an excise tax, equal to 100 percent of the acquisition costs, on the taxable acquisition of any…”

“the bill imposes an excise tax, equal to 100 percent of the acquisition costs, on the taxable acquisition of any interest in an applicable insurance contract. An applicable insurance contract is any life insurance, annuity or endowment contract in which both an applicable exempt organization and any person that is not an applicable exempt organization have, directly or indirectly, held an interest in the contract (whether or not the interests are held at the same time). An applicable exempt organization generally includes an organization that is exempt from Federal income tax by reason of being described in section 501(c)(3) (including one organized outside the United States), a government or political subdivision of a government, and an Indian tribal government. The bill provides that an interest in an applicable insurance contract includes any right with respect to the contract, whether as an owner, beneficiary, or otherwise. An indirect interest in a contract includes an interest in an entity that, directly or indirectly, holds an interest in the contract. Exceptions apply under the bill. An exception is provided if each person (other than the exempt organization) with an interest in the contract has an insurable interest in the insured person independent of any interest of the exempt organization. Another exception is provided if each person, other than an exempt organization, has an interest solely as a named beneficiary.…”