Donald John Trump today took the oath of office to become the 45th president of the United States of America.
For members of the life insurance and annuity communities, the Trump inauguration marked the official start of another chapter in the long-running fight to protect the currrent tax treatment of the products used to shield Americans against the risks of death, disability and outliving retirement savings.
Trump said nothing directly about the elderly, retirement security or financial services during the short address he gave at the inauguration.
Trump focused on talking about his philosophy of governance.
“We are transferring power from Washington, D.C., and giving it back to you, the people,” Trump said. “The establishment protected itself, but not the citizens of the country. That all changes starting right here and now.”
Later, Trump said, “We will make America wealthy again.”
Trump entered the White House as U.S. banks are releasing earnings for the fourth quarter of 2016.
Many top Republicans in the House have made simplifying the tax code a priority. In the past, life insurers have opposed tax code simplification efforts that might eliminate incentives for Americans to save for retirement or protect themselves against catastrophe, such as proposals for replacing retirement savings tax incentives with all-purpose saving programs.
During the conference calls banks are hosting to brief securities analysts on company performance, some executives are already talking about the possibility that Trump administration and House Republicans could make big changes in federal insurance tax rules, especially for bank-owned life insurance and corporate-owned life insurance.
Don Kimble, chief financial officer at Cleveland-based KeyCorp, told analysts that KeyCorp is watching closely to see how House Republicans handle COLI. “We don’t know how that would be treated in the House bill, and how that would play out,” he said.
David Duprey, the CFO at Dallas-based Comerica Inc., said Comerica has benefited from its BOLI program.
“From time to time over the past 20 years, Congress has entertained either limiting or eliminating the benefit of that tax-exempt income,” Duprey said.
For Comerica, any hit the company takes from changes in BOLI rules could keep any gains from tax reform efforts from improving earnings, Duprey said.
Dirk Kempthorne, president of the Washington-based American Council of Life Insurers, said in a statement that the ACLI looks forward to working with the Trump administration and the new Congress.
“The administration and Congress have an historic opportunity to tackle issues that will help all Americans,” Kempthorne said in the statement. “These include tax reform that promotes American families’ financial and retirement security and fixing the U.S. Department of Labor’s fiduciary regulation, which harms Americans who are planning and saving for retirement.”
The ACLI also wants to work with the administration and Congress on changing the Financial Stability Oversight Council, Kempthorne said.
Kempthorne noted that life insurers are major sources of long-term financing, and that ACLI members are eager to work on efforts to improve America’s infrastructure.
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