To The Editor:
Thank you for the excellent articles by Douglas Friedman and Barry Higgins in the Oct. 20 National Underwriter. We need a lot more like these.
The predicament that advisors find themselves in regarding their split-dollar clients is both unprecedented and troublesome. The latest salvo came from the Internal Revenue Service–after 40 years of permissive treatmentas a complex act with little grandfathering and little time to react before the deadline arrives.
I have found that more than a few advisors are not up to speed yet in this very important area and apparently have little interest in becoming informed.
Perhaps they are waiting for the insurers of their split-dollar clients to start the ball rolling. But most of these insurers do not even know which of their policies are operated as split-dollar coverage.
Others may be waiting for the writing agents to call. But many of those agents are dead, retired, relocated or simply remiss.
Part of the problem may be that commentators and other industry leaders have not elucidated the material in their normally stellar fashion. After reading many articles and treatises and having attended several seminars on the topic, I still am not comfortable with my grasp of the material.
And, I have seen conflicting interpretations. But most troubling is the lack of guidance on how to respond to certain parts of the new requirements. I would like to see, “Here is what your client should be doing and why” and “Here is the risk that he or she runs if this is not done.”