Lawmakers have introduced a bill in the U.S. House that would set new, federal standards for the sale of corporate-owned life insurance.[@@]
The bill, the “COLI Best Practices Act of 2005,” H.R. 2251, would limit the types of employees who could be covered by COLI policies and require the consent of those being insured.
H.R. 2251 was introduced by Rep. Thomas Reynolds, R-N.Y., and cosponsored by Rep. Earl Pomeroy, D-N.D., and 27 other members of the House Ways & Means Committee. More than half of the committee members have sponsored or cosponsored the bill.
The legislation would, among other things:
==Limit coverage for directors and “highly-compensated employees,” who are defined as individuals earning at least $90,000 annually or in the top 35% in terms of compensation.
==Require employers to obtain the informed consent of any employee before enrolling that employee in a COLI plan.
==Require employers to report information about their COLI plans to the Internal Revenue Service.