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Compliance May 13, 2005
US House Bill Reins in COLI Policies
May 13, 2005 (PLANSPONSOR.com) - Lawmakers have
resurrected several previous attempts to restrict companies
from taking out corporate-owned life insurance policies
(COLI) to top executives and highly compensated
workers.
Reported by Fred Schneyer
>A bill introduced in the US House of Representatives on Wednesday (HR 2251), limits coverage under COLI policies to corporate directors and highly compensated employees, according to Business Insurance. It defines highly compensated employees as those earning at least $90,000 a year or who are in the top 35% by compensation.
>The bill also requires employers to get the permission of any employee before enrolling him or her in a COLI plan and would not affect COLI policies issued before its enactment.
>The latest bill is not the first time Congressional lawmakers have tried to rein in the COLI market. US Senate Finance Committee Chairman Charles Grassley (R-Iowa) put restrictions on tax benefits associated with COLI policies in a bill he introduced in early 2004 (See Grassley Lays Groundwork For COLI Bill ).