*639OPINION.
The sole issue in this proceeding is whether the respondent, in computing the premiums earned by petitioner in 1945, erred in determining that the portion of petitioner’s reinsurance reserve which prior to June 1,1945, was carried in its premium reserve did not constitute unearned premiums on December 31, 1945, within the meaning of section 204 (b) (5) of the Internal Revenue Code.1
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(b) Definition of Income, Etc. — In the case of an insurance company subject to the tax imposed by this section—
(5) Premiums earned. — “Premiums earned on insurance contracts during the taxable year” means an amount computed as follows :
Prom the amount of gross premiums written on insurance contracts during the taxable year, deduct return premiums and premiums paid for reinsurance. To the result so obtained add unearned premiums on outstanding business at the end of the preceding taxable year and deduct unearned premiums on outstanding business at the end of the taxable year. Por the purposes» of this subsection, unearned premiums shall include life insurance reserves, as defined in section 201 (c) (2), pertaining to the life, burial, or funeral insurance, or annuity business of an insurance company subject to the tax imposed by this section and not qualifying as a life insurance company under section 201 (b);
*640Under section 434 of the New York Insurance Law (prior to its amendment by chapter 635 of the Law of 1945) which is printed in part in the margin,2 petitioner was required to and did establish a premium reserve. This reserve was a “solvency reserve” and did not constitute unearned premiums under section 204 (b) (5) because it was not known whether those funds would ever be released and become “free assets.” City Title Insurance Co. v. Commissioner, 152 Fed. (2d) 859. In conformity with this holding petitioner has never claimed a deduction for the amounts added to its reserve under this statute and, therefore, the full amount of the premiums was included in gross income.
In 1945, section 343 of the New York Insurance Law was amended by chapter 635 of the Laws of New York. The pertinent provisions of section 434, as amended, are printed in the margin.3
*641In determining its premiums earned for 1945, petitioner deducted from gross premiums the full amount of its reinsurance reserve of December 31,1945, which it had established in accordance with section 434 of the New York Insurance Law, as amended.4 Petitioner contends that this amount constituted unearned premiums within the meaning of section 204 (b) (5) of the Internal Revenue Code. Respondent disallowed the portion of the reserve which comes under section 434 (1) (a) of the New York Insurance Law as amended in 1945.
Respondent does not argue that any part of the reserve should be treated as unearned premiums on outstanding business at the end of the preceding year, as no part of the reserve at that time constituted unearned premiums. City Title Insurance Co. v. Commissioner, supra; Early v. Lawyers Title Insurance Corp., 132 Fed. (2d) 42. Respondent's sole argument herein (relying on I. T. 3798, 1946-1 C. B. 127) is that only that portion of the reserve under section 434 (1) (b) of the New York Insurance Law, as amended, constitutes unearned premiums, and that the portion of the reserve under section 434 (1) (a) represents a mere solvency reserve which is not unearned premiums within the meaning of section 204 (b) (5) of the Internal Revenue Code.
It is true that the premium reserve established by petitioner prior to June 1, 1945, did not constitute unearned premiums but it was specifically made so after that date by the provisions of section 434 (1) (a) of the New York Amended Act. The Court of Appeals for the Second Circuit in considering the original New York statute said this of the 1945 amendment: “This amendment obviously is far more than ‘declaratory.’ It represents a marked change, is strikingly different from the statutory provision now before us.”
We are convinced that the amended statute confers upon the entire reinsurance reserve existing on December 31, 1945, a status of unearned premiums under section 204 (b) (5), I. R. C., and no part of this reserve had such status at the end of the preceding year. Early v. Lawyers Title Insurance Corp., supra. The amended statute re*642quired- a funded, segregated reserve and after a prescribed period of 180 months it will be released for general corporate purposes at which time it will be taxed as income. Early v. Lawyers Title Insurance Corp., supra; Title & Trust Co., 15 T. C. 510. Cf. City Title Insurance Co. v. Commissioner, supra.
Title & Trust Co., supra, we think is controlling here. In that case the taxpayer, Title & Trust Company, complying with the directive of the Oregon Insurance Commissioner issued pursuant to Oregon statutes, segregated from its 1945 premium income an amount equal to 3 per cent of its total premiums received on title insurance policies issued during the calendar years 1942, 1943, 1944, and 1945. This amount was deemed by the directive to constitute unearned premiums and was set up on taxpayer’s books as a reserve as of December 31, 1945. The directive further required taxpayer to add to the reserve monthly thereafter an amount equal to three per cent of its premium income. At the end of 180 months from January 1, 1942, such portion of the reserve as had been maintained for more than 180 months was to be released for general corporate purposes. On these facts as enumerated above, we held, following Early v. Lawyers Title Insurance Corp., supra, that the taxpayer. properly excluded as “unearned premiums” from its 1945 premium income the amount of the reserve set up as of December 31,1945.
We can see no distinction in principle in the law and the facts which govern in the instant case from those which were present in Title & Trust Co., supra. Therefore, following that case, we decide the issue here involved in favor of petitioner.
Decision will he entered under Rule 60.