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May 12, 2002 at 08:00 PM
There’s Never A Shortage Of Outrage On Capitol Hill
When it rains, it pours.
No, this is not a pitch for Mortons salt. Rather, were using the line to describe the thundershower of tax issues that recently pelted the industry.
The life insurance business has been hit so often with attacks on its products and techniques that any new attack seems like d?j? vu all over again. And it is for this reason that the industry–with good cause–stands always ready to repel these attacks.
The latest brouhahas are the attacks on corporate-owned life insurance and split dollar.
The flap over COLI arose after the Wall Street Journal ran an article–and then followups–on so-called “janitors insurance.” This describes a situation where employers take out life insurance policies on low-wage workers and collect the death benefits when the workers die.
Many times, the workers are unaware that the employer has such a policy on their lives. It is this rather ghoulish factor that has given rise to the utterly predictable outcry from members of Congress.
Within minutes, it seemed, Rep. Gene Green, D-Texas, introduced the Life Insurance Employee Notification Act, which would require corporations who take out COLI policies to inform employees and reveal the amount of the policy.
“This bill will stop corporations from hiding these policies and force them to let their workers know that their employer stands to gain hundreds of thousands of dollars if they die unexpectedly, while their survivors receive nothing,” Green says.
