Description: Owners of nonqualified annuity contracts, individuals under qualified retirement plans, and annuity issuers are left without any published guidance on when annuity payments can be used to satisfy the SEPP [Substantially Equal Periodic Payments] exceptions to the 10 percent penalty tax under sections 72q2D and 72t2Aiv. This article discusses that problem. The insurance industry requested guidance on this issue.8

Description: A discussion of, first, the three-year transition period for adopting principle-based reserves and how it might not apply to tax reserves, and second, the tax impact of adding investment options to in-force contracts.

Description: The rules governing the tax treatment of distributions from life insurance or annuity contracts are complex. Worse, the relevant IRC section, section 72, seems at times to be the product of a conspiracy in restraint of understanding.

Description: Provides in-depth discussion of IRS Rev. Proc. 2008-24, including tax background of partial annuity exchanges. Then discusses partial annuitizations and “modified endowment contracts.”

Description: A discussion of tail-design LTC riders for annuities and how contract cash values are offset by reductions to the annuity contract. LTC benefits, and how they relate to the annuity contracts, are also discussed.

Description: Articles on IRS private letter rulings on combination products, IRS treatment of reinsurance under section 845, and IRS waivers for failed contracts under section 7702.

Description: This article provides a short history of the correction procedures previously developed to address compliance failures and the shortcomings of those procedures under sections 101f and 7702, laying the foundation for a sea change in the correction process.

Description: Clarification of the tax treatment of non-qualified deferred annuities that are “partially annuitized” is discussed in detail in this article.

Description: Updates on partial annuitization and exhanges, prevailing CSO valuation mortality tables, disclosure of offshore accounts through FATCA.

Description: IRS published final regulations on updated life expectancy and distribution period tables used for determining RMDs. The article intends to provide an overview on the development of the final regulations and highlight the key updates in final regulations, the transition rules to apply final regulations and some of the relevant issues not addressed in final regulations (e.g. MITT, Rev. Rul. 2002-62 and Notice 2004-15). The article also briefly discusses what financial institutions and actuaries would like to do before the regulations become effective on Jan. 1, 2022.