By Linda Koco
SAN ANTONIO – There is a possibility that taxing the inside buildup of life insurance products will not be included in the tax reform package being developed in Congress, according to Danae Kehoe, a member of the National Association of Insurance and Financial Advisors (NAIFA) government relations team.
The news brought NAIFA members to their feet with shouts and cheering and much clapping here during the association’s legislative forum this morning at its annual meeting.
This is subject to change and not final, Kehoe stressed, but “we are told that inside buildup will not be in the tax proposal.”
The proposal she was referring to is the tax legislation that will be needed to address the nation’s debt ceiling, which the nation will reach on Oct. 17 unless the debt limit is raised.
Legislation is required to raise the debt ceiling, she noted, and this has all of Washington “scared spit-less.”
The House Ways and Means Committee appears to have been successful in its effort to include debt ceiling legislative language requiring Congress to vote on tax reform, Kehoe noted. That will entail committee action and conference committee action. That creates “a legislative challenge for us for the foreseeable future,” the lobbyist said.
Still, news that that Congress may leave the inside buildup alone prompted Kehoe to praise NAIFA members for their persistent advocacy in this area.
In the past year, NAIFA members have visited Capitol Hill to discuss with legislators the value of the tax benefits in insurance products to American families. Some have made these trips more than once. This is in addition to the lobbying efforts of the association’s legislative team.
“You are so fantastic,” Kehoe said.
However, she cautioned that “we are still at risk.”
There may be proposals affecting corporate owned life insurance, for example. In addition she said, there may be proposals to limit retirement savings and proposals to limits employer benefits and capital gains for investment income versus compensation income.
Several other members of the NAIFA government relations team listed a host of other proposals that could affect the life insurance industry in the future. They pointed not only to implementation challenges with the Affordable Care Act but also the possibility of expansion of fiduciary standards to broker-dealers and the thousands of bills in the states that are looking to raise more money — and many other issues as well.
“Protecting our industry, our businesses, and our clients is a full time job,” said NAIFA Secretary Juli McNeely in an impassioned call to members to get involved, and stay involved, with NAIFA legislative action. “No one can do it alone.”
Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda can be reached at email@example.com.
© Entire contents copyright 2013 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.