Best’s Market Segment Report: Insurers’ Holdings in Corporate-Owned Life Insurance on the Upswing
The Best’s Market Segment Report, titled, “Increased Focus on COLI Growth,” notes that life/annuity (L/A) insurers have seen the largest increase in COLI assets, with the amount of write-in assets growing to
According to the report, companies are using COLI increasingly as a way to fund a variety of executive benefit obligations, such as employee retirement and medical benefits and deferred compensation plans. COLI also is used to protect businesses in the event of the death of key employees or business owners. When properly structured, COLI plans enjoy tax-free build-up cash values, death benefits are received tax-free and loan and withdrawal features give employers added flexibility. While COLI asset growth among L/A insurers can be attributed to increases in cash surrender values resulting from investment gains and interest credits, several L/A insurers have either initiated COLI programs or made substantial additions to existing COLI policies over the past few years.
For the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=275390.
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