to its security holders. . (2) Foreign corporations Section 881 of such Code is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following: (f) Exemption for qualified investment income dividends of catastrophic risk transfer companies (1) In general Except as provided in paragraph (2), no tax shall be imposed under paragraph (1)(A) of subsection (a) on any qualified investment income dividend received from a catastrophic risk transfer company which meets the requirements of section 860M(a) for the taxable year with respect to which the dividend is paid. (2) Exceptions Paragraph (1) shall not apply any dividend described in section 871(n)(2). (3) Qualified investment income dividend For purposes of this paragraph, the term qualified investment income dividend has the same meaning given such term by section 871(n)(3). . (c) Conforming amendment The table of parts for subchapter M of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Part V-Catastrophic risk transfer companies. . 3. State taxation of reinsurance premiums of catastrophic risk transfer companies (a) Prevention of double taxation A taxing jurisdiction other than the State under the laws of which a catastrophic risk transfer company is created or organized shall not impose a premium tax on any premiums paid to, or received by, such company on a policy of reinsurance. (b) Coordination of rate of premium tax with tax on foreign reinsurers If a State allowed under subsection (a) imposes a premium tax on a catastrophic risk transfer company on premiums on a policy of reinsurance, the amount of such tax shall not exceed the tax which would have been imposed under section 4371 of the Internal Revenue Code of 1986 if such premiums were paid to a foreign insurer or reinsurer. (c) Definitions For purposes of this section— (1) Catastrophic risk transfer company The term catastrophic risk transfer company has the meaning given such term by section 860M of the