Guidelines designed to give employees more control over corporate-owned life insurance were advanced during the fall meeting of the National Association of Insurance Commissioners here.
Key points of the guideline developed by the NAICs COLI working group under the direction of North Dakota Insurance Commissioner Jim Poolman include an affirmative consent provision and a no-retaliation provision.
The affirmative consent provision or opt-in would require companies to inform employees of an intention to take out a life insurance policy as well as receive permission to do so.
The no-retaliation clause would prevent retaliation against an employee who did not allow an employer to take out a policy on his or her life.
Poolman commented on the draft after it was moved out of the working group. “I am pleased that the industry saw the need for affirmative consent. It strengthens our guidelines enormously.”
The guidelines were later adopted by the working groups parent “A” committee and will be reviewed by the executive committee and potentially, the plenary at the winter meeting in December.
COLI can be used by an employer for a number of reasons, including protecting against costs associated with an employees disability or death. It can also be used to finance employee benefits.
A separate consumer effort is being developed by a subgroup of the small face amount working group under the direction of South Carolina regulator Leslie Jones. The group is trying to determine how companies search for multiple policies upon the death of an insured.