Common use of Tax Procedures Clause in Contracts

Tax Procedures. 1. The Ceding Company and the Pool hereby enter into an election under Treasury Regulations Section 1.848-4(g)(8) whereby: a. For each taxable year under this reinsurance agreement, the party with net positive consideration, as defined in the regulations promulgated under Treasury Code Section 848, will capitalize specified policy acquisition expenses with respect to this reinsurance agreement without regard to the general deductions limitation of Section 848(c)(1). b. The Ceding Company and the Pool agree to exchange information pertaining to the amount of net consideration for all reinsurance agreements in force between them to ensure consistency for purposes of computing specified policy acquisition expenses. c. This election shall be effective as of the beginning of the taxable year, which includes the effective date of this Agreement and shall remain in effect for all subsequent taxable years for which this Agreement remains in effect. 2. The Pool will not reimburse the Ceding Company for any premium taxes.