or annuity contract, and (B) is of a kind that would be subject to tax under subchapter L of this chapter if such income were the income of a domestic insurance company. (2) Exception Such term shall not include any exempt insurance income (as defined in subsection (c)). (b) Special rules for determination of gross income and allocable deductions For purposes of determining gross income under subsection (a) and deductions allocable to insurance income under section 952(e), the following rules shall apply: (1) Certain deductions not allowed The following provisions of subchapter L shall not apply: (A) The small life insurance company deduction. (B) Section 805(a)(5) (relating to operations loss deduction). (C) Section 832(c)(5) (relating to certain capital losses). (2) Special rules for amounts included in income The items referred to in— (A) section 803(a)(1) (relating to gross amount of premiums and other considerations), (B) section 803(a)(2) (relating to net decrease in reserves), (C) section 805(a)(2) (relating to net increase in reserves), and (D) section 832(b)(4) (relating to premiums earned on insurance contracts), shall be taken into account only to the extent they are in respect of any reinsurance or the issuing of any insurance or annuity contract described in subsection (a)(1). (3) Treatment of reserves Reserves for any insurance or annuity contract shall be determined in the same manner as under section 954(d). (c) Exempt insurance income For purposes of this section— (1) Exempt insurance income defined (A) In general The term exempt insurance income means income derived by a qualifying insurance company which— (i) is attributable to the issuing (or reinsuring) of an exempt contract by such company or a qualifying insurance company branch of such company, and (ii) is treated as earned by such company or branch in its home country for purposes of such country's tax laws. (B) Exception for certain arrangements Such term shall not include income attributable to the issuing (or reinsuring) of an exempt