premiums from exempt contracts (determined without regard to this subparagraph) with respect to which no policyholder, insured, annuitant, or beneficiary is a related person (as defined in section 954(b)). (C) Substantial activity requirements A contract issued by a qualifying insurance company or qualifying insurance company branch shall not be treated as an exempt contract unless such company or branch, as the case may be— (i) conducts substantial activity with respect to an insurance business in its home country, and (ii) performs in its home country substantially all of the activities necessary to give rise to the income generated by such contract. (3) Qualifying insurance company (A) In general The term qualifying insurance company means any controlled foreign corporation— (i) which— (I) is subject to regulation as an insurance (or reinsurance) company by its home country, and is licensed, authorized, or regulated by the applicable insurance regulatory body for its home country to sell insurance, reinsurance, or annuity contracts to persons other than related persons (within the meaning of section 954(b)) in such home country, and (II) is engaged in the insurance business and would be subject to tax under subchapter L if it were a domestic corporation, (ii) which derives more than 50 percent of its aggregate net written premiums from the issuance or reinsurance by such controlled foreign corporation and each of its qualifying insurance company branches of contracts with respect to which no policyholder, insured, annuitant, or beneficiary is a related person (as defined in section 954(b)), except that in the case of a branch, such premiums shall only be taken into account to the extent such premiums are treated as earned by such branch in its home country for purposes of such country’s tax laws, (iii) more than 50 percent of the gross receipts of which for the taxable year— (I) consist of premiums for insurance or reinsurance in connection with property, liability, or the lives or health of individuals, and