Bank Owned Life Insurance (BOLI) is the predominant investment asset for financing the cost of employee benefit plans. Executive Benefits Network has helped hundreds of clients in successfully implementing and administering BOLI programs. Executive Benefits Network simplifies regulatory compliance requirements for the bank by assisting with:

Implementation Services:

  • Pre-Purchase Analysis
  • Sample BOLI Investment Policy
  • Sample Board Resolution
  • Annual BOLI Risk Assessment
  • Ongoing Reporting of Asset Values and Plan Liabilities (if applicable)

Interagency Statement on the Purchase and Risk Management of Life Insurance (OCC 2004-56):

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS) (agencies) are providing this guidance for institutions to help ensure that their risk management processes for BOLI are consistent with safe and sound banking practices.

Executive Benefits Network assists banks in the following:

  • Effective senior management and board oversight
  • Comprehensive policies and procedures, including appropriate limits
  • A thorough pre-purchase analysis of BOLI products
  • Effective ongoing system of risk assessment, management, monitoring and internal control process, including appropriate internal audit and compliance frameworks

IRS Section 101(j):

Under IRS Section 101(j), certain eligibility and notice and consent requirements must be satisfied in order for any death benefit payable under and “employee-owned life insurance contract” to qualify for the federal income tax exclusion.

At the time of policy issuance or material change of a contract, the insured must be, with respect to the employer, one of the following:

  • A director
  • One of the 5 highest paid officers
  • A 5% owner at any time during the year or preceding year
  • An employee who had compensation of at least $100,000 in the preceding year (adjusted for cost of living)
  • An employee who is among the highest paid 35% of employees

Now… That’s Knowledge You Can Bank On ™

Please visit our Resource Center to see additional regulations.