Common use of Proxy Tax Reimbursement Clause in Contracts

Proxy Tax Reimbursement. Pursuant to Internal Revenue Code of 1986 ----------------------- as amended ("The Code") Section 848, insurance companies are required to capitalize and amortize specified policy acquisition expenses. The amount capitalized is determined by proxy based on a percentage of "reinsurance premiums" as defined in regulations relating to The Code Section 848. The Reinsurer and the Ceding Company agree that any costs which would result from The Code Section 848 are not subject to reimbursement hereunder.