The life insurance industry is preparing for a busy legislative agenda during the rest of 2003.
Kim Dorgan, senior vice president of federal affairs for the American Council of Life Insurers, says pension reform, taxation, privacy and insurance regulatory reform all will be on the congressional calendar before the first session of the 108th Congress ends.
Dorgan says she is excited about the Portman-Cardin pension reform bill, H.R. 1776, which has a provision establishing an incentive for retirees to take some of their pension savings in the form of a lifetime annuity.
Moreover, she says, she is encouraged that House Ways and Means Committee Chairman Bill Thomas, R-Calif., personally supports the annuity concept.
H.R. 1776 was approved by the committee in June.
Dorgan says the Senate, however, still has not really looked at the broad pension reform issues addressed by H.R. 1776. Rather, she says, the Senate is still thinking about pension issues in the context of cleaning up Enron.
It will be a longer go in the Senate on pension reform, Dorgan says, but ACLI is taking steps to encourage Senate activity.
On the tax front, she says, several insurance-related issues are contained in an international tax bill, H.R. 2896.
First, Dorgan says, the billl would extend the current treatment of investment income earned by foreign subsidiaries of U.S. financial services firms under Subpart F of the tax code until 2007.
In addition, she says, it will extend the current suspension of taxes paid by mutual companies under Section 809 of the code.
ACLI, Dorgan stresses, will be working to provide similar tax treatment to policyholder surplus accounts held by stock companies under Section 815 of the code.
Finally, she says, H.R. 2896 addresses the nonqualified deferred compensation issue in a way that provides the first formal legislative recognition of rabbi trusts.
Bob Plybon, president of the Association for Advanced Life Underwriting, Falls Church, Va., says AALU has worked hard with technical input, lobbying and grass-roots activity, to assure any changes Congress considers on deferred comp are reasonable.
The issue, Plybon says, appears to be moving in a positive direction, but it is unclear whether legislation will be enacted this year.
Turning to corporate-owned life insurance, Plybon says the industry has worked hard to promote a better understanding of the benefits provided by COLI policies.