Corporate Owned Life Insurance (COLI) & Bank Owned Life Insurance (BOLI)

Corporations buy permanent life insurance to informally fund and finance future obligations of the corporation, such as post retirement life and health insurance, executive deferred compensation plans and SERPS and other long term employee benefits obligations. The corporation is the owner, premium payor and the beneficiary of the life insurance policies.

The corporation may set up a Trust to own the insurance policies in order to segregate the insurance assets and cash flows from other corporate assets and cash flows. However, the insurance in the Trust is treated for tax and accounting purposes just like other corporate assets and earnings. Sometimes these Trusts are set up as Rabbi Trusts which protect the assets on behalf of the beneficiaries of the Trust in case of a change in management of the corporation. The COLI and BOLI tax attributes, which make the insurance valuable to corporations as an investment and funding vehicle are that the COLI assets grows tax deferred and if the insurance policies are held to death, the proceeds are tax free.This is very attractive to corporations and particularly banks that have low cost of after tax money.

Since 1985, Steven Eisenberg has worked extensively in the COLI and BOLI market (variable and general account products and traditional and universal life insurance products).

In 1986, he pioneered the development of large case COLI (both leveraged and non leveraged) and subsequently large case BOLI as a consultant for major life insurance companies, including the development of sophisticated illustration systems for COLI and BOLI products. He designed, priced, and developed administration procedures, set specification for illustration systems, and consulted with brokers on behalf of the major insurance carriers regarding their entry into the corporate market place and design of their COLI and BOLI products, COI charges and broker compensation. He is currently recognized as a leading expert in the design of COLI and BOLI products.

Steven Eisenberg founded, developed and was the senior managing partner of Milliman & Robertson’s (now known as Milliman) Atlanta life insurance practice until he retired from Milliman at the end of 1998. Milliman has one of the largest actuarial life insurance consulting practices in the United States. Almost all of the firm’s COLI and BOLI work was developed or directed by Steven and his Atlanta office staff. From the mid 1980’s through the mid 1990’s, he consulted with more large life insurance companies to help them enter the COLI and BOLI market and developed more COLI and BOLI products for these companies than any other consulting actuary in the country.

Steven has continued to work extensively with COLI and BOLI.

His clients include life insurance companies, COLI and BOLI specialized broker organization, COLI and BOLI administrators and illustrations organizations, and the COLI or BOLI purchaser.

Much of his expert witness and litigation support involves COLI and BOLI and other broad based insurance purchases as a funding and financing vehicle, broker and administrative functions (COI management) and compensation, policy owner tax, COI Management and other issues relating to COLI and BOLI and its purchase and administration, including third party administrators, and all aspects of policy forms and contracts.