In the case of United States v. John Hancock Mutual Life Insurance Co., 1960, the U.S Supreme Court ruled on a dispute over tax deductions related to policyholder dividends. The Internal Revenue Service (IRS) had denied John Hancock's claim for certain deductions in its income tax returns from 1946-1949, arguing that these were not "dividends paid" within the meaning of Section 204(c)(3) of the Revenue Act of 1939 and therefore could not be deducted from gross income. The insurance company contested this decision, leading to litigation. The Supreme Court held that under Massachusetts law - where John Hancock was incorporated - policyholders did have a right to share in divisible surplus as soon as it was determined and apportioned by directors; hence they constituted “dividends paid” during taxable year when declared and credited to policyholders' accounts even though actual payment might occur later or indeed never if policies lapsed beforehand. Therefore, such amounts were deductible under federal tax laws at time they were credited rather than when actually disbursed.

The dissenting opinion in the case of United States v. John Hancock Mutual Life Insurance Co., et al. argued that the majority's decision to uphold a lower court ruling, which found that certain insurance companies had violated antitrust laws by conspiring to fix prices and restrict competition, was incorrect. The dissenters believed that these practices were not illegal under existing law because they were part of the business of insurance, which is regulated by state law rather than federal antitrust legislation. They also pointed out that Congress had explicitly exempted "the business of insurance" from federal regulation when it passed the McCarran-Ferguson Act in 1945. Therefore, they contended, it was inappropriate for a federal court to intervene in this area unless there was clear evidence that state regulators were failing to enforce their own laws against anti-competitive behavior.