### Question
How does NORMAL TAXES AND SURTAXES define qualified nonguaranteed contract?


### Answer
Under *26 U.S.C. § 419*, **qualified nonguaranteed contract** is defined as:

> any insurance contract (including a reasonable premium stabilization reserve held thereunder) if—



(I) there is no guarantee of a renewal of such contract, and



(II) other than insurance protection, the only payments to which the employer or employees are entitled are experience rated refunds or policy dividends which are not guaranteed and which are determined by factors other than the amount of welfare benefits paid to (or on behalf of) the employees of the employer or their beneficiaries

#### Citation:
  - *26 U.S.C. § 419*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter D-Deferred Compensation, Etc. > PART I-PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC. > Subpart D-Treatment of Welfare Benefit Funds**

