AALU Members Take Action Items To Capitol Hill

Comiskey said he also expects passage this year of legislation that would codify industry best practices on COLI. Approved earlier by the Senate Finance Committee, this COLI reform provision of the so-called NESTEG pension bill would bolster disclosure requirements about COLI on employees while retaining COLI’s role as an employee benefit and in business continuation planning.

Comiskey said the AALU is providing input to the IRS to help shape guidelines on new tax rules that Congress passed as part of the American Jobs Creation of 2004 bearing on nonqualified deferred compensation plans. To apprise its members of the rules’ implications for such plans, the AALU is providing analysis through its Washington Report bulletins and through an interactive Hot Topic “teleseminar” featuring representatives of the U.S. Department of Treasury’s Office of Tax Policy.

The AALU’s tax guidance recently bore fruit in the recently published Rev. Proc. 2005-25. The ruling substantially revised the IRS’ proposed Safe Harbor valuation approach with a variation of a formula suggested by the AALU. Comiskey cautioned that additional “testing” of 2005-25 is needed to determine whether the rule will usefully address the original proposal’s failure to adequately reflect the surrender costs of insurance policies.

Comiskey also counted among the AALU’s successes lobbying efforts it executed in concert with the National Association of Insurance and Financial Advisors and the American Council of Life Insurers that defeated legislation in several states to relax insurable interest laws. If enacted, the various bills would have permitted investor-owned life insurance in states where it is not now legal to market. IOLI allows private investors to use a charity’s rights under insurance laws to purchase life insurance on a third party.

The insurance industry’s stand on IOLI prompted the Bush administration this year to propose a 25% excise tax on IOLI death benefit proceeds. Comiskey said “it appears likely” that Congress will address the proposal this year. [Note: The Senate Finance Committee leadership introduced a bill dealing with IOLI. See story on page 6.]

Sutton emphasized that maintaining positive momentum on its legislative agenda will require the AALU to continue to pool its efforts with NAIFA, ACLI and AALU’s Issues Alliance Partners (which includes several insurance companies).

Campbell Gerrish, a facilitator for the AALU’s Strategic Planning Committee, noted during a general session that the organization had 2,014 members at the conclusion of the 2003-2004 fiscal year. Of that number, about a third are politically active; 61% are between the ages of 45 and 64; 48% live on the East Coast; and most are white males.

The committee’s vision for 2008, said Gerrish, includes 1,500 politically active, and more demographically diverse, members, each belonging to the AALU’s Capital Hill Club. The committee additionally aims to boost its lobbying war chest to $6.5 million, up from $3 million currently, and to build a “dream team” of lobbyists and communications specialists to interface with elected officials and media.

AALU President Gus Comiskey Jr. expects passage this year of legislation that would codify industry best practices on corporate-owned life insurance.