Life Insurance

News & Analysis as of

Seventh Circuit Holds that Insurers Cannot Challenge Policies for Lack of Insurable Interest

On October 12, 2016, the United States Court of Appeals for the Seventh Circuit, in an opinion authored by Judge Richard Posner, affirmed a district court decision finding that securities intermediary U.S. Bank, N.A. is...more

[Webinar] Business Planning in Light of Proposed Regulations under Code § 2704 - October 27th, 12:00p.m. CT

In this webinar, Steve Gorin, the author of his quarterly newsletter, will discuss the proposed regulations under IRC § 2704 that would increase the valuation of business entities in many cases. Attendees will learn when the...more

California's New End of Life Option Act Impacts Insurers

California's "End of Life Option Act" (the Act) went into effect June 9, 2016—making California the fifth state (behind Oregon, Washington, Vermont and Montana) to allow terminally ill adults with fewer than six months to...more

STOLI Scheme Saved By Expiration of Contestability Clause

On September 22, the Florida Supreme Court in Wells Fargo Bank NA v. Pruco Life Insurance Co., No. SC15-382 (Fla. Sept. 22, 2016) denied Pruco Life Insurance Company’s challenge to the validity of an insurance policy...more

Upcoming CLE examines ways to avoid tax traps in life insurance

Beware that an employer-owned life insurance contract might not qualify for the usual exclusion from regular income tax. An “employer-owned life insurance contract” (a term that applied to much more than one would think) does...more

Your daily dose of financial news - The Brief – 9.28.16

It wasn’t exactly a direct reaction to his testimony on the Hill, but Wells Fargo CEO John Stumpf didn’t do himself any favors there, and Wells Fargo’s Board has announced that it will claw back an estimated $41 million in...more

Florida Supreme Court Advises the Eleventh Circuit that A STOLI Policy Cannot Be Rescinded After the Contestability Period

The U.S. Eleventh Circuit Court of Appeals certified 2 questions under Florida law to the Florida Supreme Court relating to 3 STOLI life insurance policies. The Florida Supreme Court rephrased (and conflated) the 2 questions...more

Florida Supreme Court Holds that STOLI Challenges are Barred by Two-Year Contestability Clause

On September 22, 2016, the Florida Supreme Court issued an eagerly-awaited opinion in Wells Fargo Bank, N.A. v. Pruco Life Insurance Co. The Court held that Florida's two-year contestability statute applies to bar an...more

Federal Court Issues Trial Ruling in Section 36(b) “Manager of Managers” Lawsuit: AXA Advisory and Administrative Fees Held Not to...

The U.S. District Court for the District of New Jersey issued its post-trial ruling on August 25, 2016 in Sivolella v. AXA Equitable Life Insurance Company—the first Section 36(b) trial decision since 2009. The Court...more

[Webinar] Life Insurance to Fund Buyouts or Loss of a Key Person: Practical Ways to Avoid Tax Traps and Other Pitfalls - September...

Life insurance can help a business that loses an owner or other key person. Although life insurance death benefits can be tax-free, part or all of the benefits are taxable if not done the right way. Please join Steven B....more

Put Me in Coach! Using Split Dollar Life Insurance Plans to Compensate Division I Coaches

In August 2016, the national sports media provided details regarding the compensation package for Coach Jim Harbaugh at the University of Michigan. It comes as no surprise to anyone that Division I football and basketball...more

Employers Who Self Administer Life Insurance Plans Had Better Do So Correctly

Many employers self-administer welfare benefit plans such as life insurance or disability insurance plans. This self administration requires the employer to determine eligibility for coverage, remit proper premiums and notify...more

U.S. Citizens Retiring Abroad: “Tax Trigger” Situations and Related Disclosure Forms

The following is a bolded checklist of important situations that may “trigger” a tax review by a skilled United States tax professional. Many of these situations also require a simultaneous review by a foreign tax...more

California Court Finds That Discretionary Clauses in Health Insurance Policies Are Enforceable

In 2011, the California legislature passed Insurance Code Section 10110.6 which bans the use of discretionary clauses in any policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not...more

What’s New in the Revised Uniform Unclaimed Property Act?

The unclaimed property laws of most states are based in whole or in part on one of the multiple versions of the Uniform Unclaimed Property Act promulgated by the Uniform Law Commission. The Uniform Act was initially...more

NAIC's New Cybersecurity Model Law Draft Is Still Flawed

Insurers are a prime target for hackers as a result of the vast stores of valuable data they maintain. Not all information is created equal, and it varies in value. Hacker services and software, illegal drugs, cyberweapons...more

Are You Prepared for Disruption? New regulations, new challenges and opportunities [Expect Focus – Vol. II, July 2016]

- Fed Takes First Steps Toward Setting Capital Requirements for Some Insurers - New Wave of COI Rate Increase Lawsuits Hits the Industry - STOLI Policies Cancelled, Insurers Retain Premium -...more

A Constitutional Challenge to Florida's New Unclaimed Property Act Amendments

In April, Florida amended its Disposition of Unclaimed Property Act (“Act”) to require life insurers to perform Death Master File (DMF) searches for all policies issued since 1992. The amended Act also provides that a DMF...more

NAIC Round-up: Selected Recent Developments At The National Association Of Insurance Commissioners

Life Policy Summaries/Narratives - An NAIC working group is considering how to revise provisions in its model regulations governing the content of the policy summary required in life insurance policy illustrations and...more

STOLI Policies Cancelled, Insurers Retain Premium

Two federal appellate courts have affirmed, on different grounds, the cancellation of large life insurance policies that were alleged to be stranger originated life insurance (STOLI), permitting the issuing insurers to retain...more

Changes in Cuba May Impact the Insurance Industry

While much remains to be determined, the recent easing of U.S. restrictions on travel to and trade with Cuba may bring opportunities for U.S. and global insurance companies. However, many questions and obstacles remain. This...more

New Wave of COI Rate Increase Lawsuits Hits the Industry

Historically, increases to cost of insurance (COI) rates on universal life (UL) policies have been met with legal challenges from policyholders, and sometimes, regulatory opposition spurred by policyholder complaints. The...more

Illinois Treasurer Holds Statewide Hearings on Life Insurers that Do Not Pay Death Benefits

Illinois State Treasurer Michael Frerichs has called for statewide hearings to educate the public on how life insurance companies avoid paying death benefits. The first hearing is scheduled for August 17th in Normal,...more

High Net Worth Family Tax Report, Vol. 11, No. 2

IRS Seeks to Limit Valuation Discounts for Family-Controlled Entities: Proposed Section 2704 Regulations - Proposed regulations issued on August 2, if finalized in their present form, will significantly limit the ability...more

Ten Things You Should Know About the 2016 Uniform Unclaimed Property Act

The 2016 Uniform Unclaimed Property Act (2016 Act) was adopted unanimously by the Uniform Law Commission (ULC) in a 49-0 vote at its 2016 summer meeting. The adoption of the revised model law is a significant step forward for...more

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