Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
WASHINGTON, Feb. 27 -- The American Council of Life Insurers issued the following news release:
The life insurance industry recognizes the efforts of House Ways & Means Committee Chairman David Camp and his entire tax-writing panel to update the nation's tax code.
But life insurance companies, agents and brokers are greatly concerned over the effect the chairman's proposal would have, if implemented, on the 75 million American families and thousands of businesses that rely on the industry for help in responsibly managing risks and planning for their financial futures.
One provision, on company-owned life insurance (COLI), would impose new taxes on life insurance used by businesses small and large. Many businesses use COLI to protect against financial risk or job loss stemming from the death of owners or key employees. COLI also is a widely-used funding mechanism for employee and retiree benefits. Congress affirmed the benefits and tax treatment of COLI and assured its responsible use in bi-partisan legislation enacted in 2006.
The industry also is concerned about a whole new series of tax increases on life insurance companies that would, if adopted, make industry products such as life insurance and annuities less affordable. In the aftermath of the financial crisis, and with people living longer than ever before, the guarantees offered by the industry are more important than ever. Proposals to make industry products less accessible make no sense.
In addition, the industry is concerned with the chairman's proposal to impose new taxes on retirement savings and change contribution limits and distribution rules that would create significant impediments to Americans' much-needed retirement readiness efforts. The House Ways & Means Committee - indeed, all of Congress -- should focus on expanding opportunities for individuals to save for their retirement and employers to voluntarily offer workplace retirement plans.
Life insurance companies, agents and brokers look forward to working with the chairman and his entire committee to explain how industry products, services and financial advice benefit 75 million American families and thousands of businesses across the country.
The AALU is the leading organization of successful life insurance professionals who are a trusted voice on the unique public policy issues involving the advanced life markets. Founded in 1957, the AALU counts more than 2,200 professionals as members.
GAMA International is a worldwide professional association serving 5,500 field leaders in the insurance and financial services industry. Its members recognize their critical role in finding, building and inspiring the next generation of top performers who will, in their turn, lead the industry into the future. To help build these leaders, the association provides its members with professional development resources and opportunities, including educational, networking and leadership. GAMA International's website is located at www.gamaweb.com.
About NAIFA: Founded in 1890 as The National Association of Life Underwriters (NALU), NAIFA is one of the nation's oldest and largest associations representing the interests of insurance professionals from every Congressional district in the United States. NAIFA members assist consumers by focusing their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA's mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members.
The National Association of Independent Life Brokerage Agencies (NAILBA) is a nonprofit trade association with over 370 member agencies in the U.S. and Canada. NAILBA is the premiere insurance industry organization promoting financial security and consumer choice through the use of independent brokerage distribution. The purpose of NAILBA is to serve as the national association of life, health and annuity insurance distributors.
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