Description: A discussion of the three private letter rulings addressing the tax treatment of group insurance contingent annuity contracts providing guaranteed minimum withdrawal benefits linked to an investment account released by the Internal Revenue Service.

Description: This is an article about how to place value on an annuity benefit.

Description: In September 2009, the Internal Revenue Service IRS released a private letter ruling PLR 200939018 June 18, 2009 addressing a contract in which the right to receive annuity payments and otherwise access a contract’s cash value is contingent upon the annuitant living to a specified age. The ruling holds that the contract is an annuity contract for purposes of section 72 of the Code. This article reviews the specifics of the ruling.

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: This article discusses the implications of a principle-based reserve PBR system with respect to federal income taxation of life insurance companies, particularly with respect to tax reserves and their deductibility for tax purposes. The article discusses potential problems with existing tax rules for reserve deduction, what courses of action the IRS could take, and suggestions for design features of a PBR approach that would make it more consistent with current tax rules. Life insurance product tax implications are also discussed.

Description: A discussion of the PLR that addresses a Wellness Rider that an affiliated group of life insurance companies proposed to offer only on a prospective basis with newly issued life insurance contracts.

Description: The IRS believes that any segregated asset account comprised of a pool of individual securities will run afoul of the investor control doctrine. This article articulates that such a conclusion would be deeply flawed based on the administrative, congressional, and judicial precedents involving the investor control doctrine.

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”.