Description: This article discusses a new procedure for correcting inadvertent failures to satisfy the diversification requirements applicable to variable annuity and life insurance contracts under section 817h of the Internal Revenue Code.

Description: A brief overview of the rules for corporate owned life insurance in section 101j and then summarizes the guidance contained in the IRS notice.

Description: This update column from ACLI the “General Explanations of the Administration’s Revenue Proposals for Fiscal Year 2022” (Green Book).

Description: The article focuses on the policyholder tax considerations specific to various types of contracts sold by life insurance companies. When evaluating merger and acquisition or reinsurance transactions, buyers need to be aware of the product tax compliance (PTC) requirements and evaluate any associated risks

Description: This article considers PLR 201304003, which addressed the application of Internal Revenue Code section 1035 to the exchange of a survivorship, or “second-to-die,” life insurance contract after the death of one of the insureds for a new life insurance contract covering only the life of the surviving insured.

Description: On January 19, 2005, the Treasury Department and the Internal Revenue Service the “Service” responded to a life insurance industry request for guidance on the treatment of qualified additional benefits “QABs” under sections 7702 and 7702A of the Internal Revenue Code through the release of Revenue Ruling 2005-6 the “Ruling”.

Description: COLI products continue to be the focus of litigation by the IRS over the deductibility of policy loan interest. This COLI Update consists of two articles concerning COLI cases and their most recent court decisions. The first concerns a District Court’s ruling on insurable interest, and the second provides an analysis of the Sixth Circuit reversal of a trial court decision in a case involving economic substance.

Description: Illustrates the lack of clarity about how the various grandfather clauses applicable to life insurance contracts should be applied in practice.

Description: On June 17, 2019, the Internal Revenue Service published Final Regulations implementing changes to loss reserve discounting under section 846 of the Internal Revenue Code made by the Tax Cuts and Jobs Act. This note addresses changes made in the Final Regulations, particularly modification of rules for determining the interest rate used for discounting, in response to comments from taxpayers on the proposed regulations.

Description: This article summarizes the treatment of changes in the basis for determining life insurance tax reserves under prior law and describes the changes enacted by the Tax Cuts and Jobs Act. It further explains the procedures for changing the basis of computing reserves under the new rules as outlined in Revenue Procedure 2019-10, the IRS’s December 2018 guidance on the subject, and discusses the uncertainties that remain.