Description: Update on Federal Tax Issues Under the 2001 CSO Mortality Tables

Description: Guidance and interpretation regarding reasonable mortality charge requirement of Section 7702, based from IRS Notice 2004-61, 2004-41 I.R.B. 596 of October 12, 2004.

Description: The article addresses the safe harbor guidance provided in Notice 2016-63 for 2017 CSO contracts satisfying the section 7702 reasonable mortality requirements

Description: This article discusses Internal Revue Code, ‘IRC,’ Sections 7702 and 7702A with respect to the implementation of the 2001 CSO Mortality Table, which must be used in the calculations for policies issued on or after January 1, 2006. “The insurance industry has requested guidance from the Treasury Department and the Internal Revenue Service on the proper application of the current computational rules to the 2001 CSO Mortality Table but, to date, such guidance has not been provided. Therefore, the Taxation Section established the 2001 CSO Maturity Age Task Force, the members of which authored this article, to propose methodologies that would be actuarially acceptable under Sections 7702 and 7702A of the Code for calculations under contracts that do not provide for actual maturity before age 100.” This article summarizes the task force recommendations.

Description: Discusses how companies must ensure that significant and necessary product development, and administrative and compliance system changes, have been completed and tested in time to accommodate new requirements.

Description: This article is a general discussion about prior correction procedures for failed life insurance contracts and the new IRS procedure for remediation.

Description: This article begins with a brief review of the general requirements of section 7702A and the consequences of MEC status for a life insurance contract and continues with a description of the evolution of the inadvertent MEC correction procedures over the past near decade.

Description: A discussion of the proposed safe harbor with respect to calculations for contracts where the insured reaches age 100.

Description: The Internal Revenue Service issued its seminal ruling interpreting Internal Revenal Code section 7702A[c][3][B][i], commonly referred to as the Necessary Premium Test [NPT]. The purpose of the NPT is to shelter certain death benefit increases from material change status, avoiding the 7 pay test's reapplication on their account.

Description: The different broad purposes served by the material change concept under federal tax law are outlined. More specific material change and similar issues that are pertinent to particular Code provisions and guidance from the IRS that has addressed those issues are also addressed. In the final part of this article, authors comment on whether any overarching principles can be gleaned that can assist insurers and policy owners in making decisions about whether particular changes can safely be made, and thoughts are offered with respect to future potential IRS guidance that would be helpful as taxpayers navigate these often uncertain waters.