Corporate Owned Life Insurance - COLI

Unit 5302 · 05-05-2002, 12:34 PM

Rev: Actually, law has mostly prevented using COLI premium payments as a tax deduction since the mid-1990's. Wal Mart ended the practice of insuring all employees at that time because of that change in the system. In my long winded original post, I did mention that Texas has no case law identifying insurable interest on any employees lower than executive level. This is the reason the lawsuit is being gone about in Texas, and not Georgia.

Industry analysts are watching the suit with great interest. Texas has already pushed the limits of their jurisdiction (probably way over), but they don't seem to mind that fact. There is a concern that the Texas courts could ignore the fact the polices are owned and assigned out of Georgia, which would mean an appeal as I'm sure Wal Mart isn't about to pay out millions. Here's why the insurance industry cares so much. If Wal Mart were to lose, the money they received for the death benefit would then be marked as payable to the estate of the insured. Wal Mart could then choose to go back to the insurance company saying Wal Mart entered into a contract with the insurance company under the concept the death benefit would be paid to the owner, and not the insured. Potentially, the insurance company could deal with it in the end.

I actually found it extremely interesting that they mentioned Hartford Life at all in the Walll Street Journal, Jim. It really showed their lack of research because Hartford is not a major player in the COLI industry. I don't even think they have a dedicated COLI division?

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Life	bigwhitecobra	Blue Oval Lounge	41	06-10-2004 10:29 PM
Quality of Life and the struggle.	Mercury	Blue Oval Lounge	17	09-04-2002 12:39 PM
Insurance law question..	Coupe Devil	Blue Oval Lounge	8	08-08-2002 11:32 PM
Pondering Life, and the use of the Science behind it. (Might Find boring.)	Mercury	Blue Oval Lounge	10	12-05-2001 01:46 AM

05-05-2002, 12:34 PM	#5
Unit 5302 Registered Member Join Date: May 1999 Posts: 5,246	Rev: Actually, law has mostly prevented using COLI premium payments as a tax deduction since the mid-1990's. Wal Mart ended the practice of insuring all employees at that time because of that change in the system. In my long winded original post, I did mention that Texas has no case law identifying insurable interest on any employees lower than executive level. This is the reason the lawsuit is being gone about in Texas, and not Georgia. Industry analysts are watching the suit with great interest. Texas has already pushed the limits of their jurisdiction (probably way over), but they don't seem to mind that fact. There is a concern that the Texas courts could ignore the fact the polices are owned and assigned out of Georgia, which would mean an appeal as I'm sure Wal Mart isn't about to pay out millions. Here's why the insurance industry cares so much. If Wal Mart were to lose, the money they received for the death benefit would then be marked as payable to the estate of the insured. Wal Mart could then choose to go back to the insurance company saying Wal Mart entered into a contract with the insurance company under the concept the death benefit would be paid to the owner, and not the insured. Potentially, the insurance company could deal with it in the end. I actually found it extremely interesting that they mentioned Hartford Life at all in the Walll Street Journal, Jim. It really showed their lack of research because Hartford is not a major player in the COLI industry. I don't even think they have a dedicated COLI division?