Description: On May 24, 2005, the Treasury Department and Internal Revenue Service published a notice of proposed rulemaking the “Notice” proposing regulations under Internal Revenue Code §7702, the federal tax definition of a “life insurance contract.” Discussion of determining 'attained age' for joint or multiple life policies.

Description: This article reviews the definition of “cash surrender value” in section 7702f2A and in the regulations proposed under that provision but never finalized. The discussion then recaps the 2005 Rulings and describes the recently issued letter rulings.

Description: A discussion of the proposed safe harbor with respect to calculations for contracts where the insured reaches age 100.

Description: The Internal Revenue Service issued its seminal ruling interpreting Internal Revenal Code section 7702A[c][3][B][i], commonly referred to as the Necessary Premium Test [NPT]. The purpose of the NPT is to shelter certain death benefit increases from material change status, avoiding the 7 pay test's reapplication on their account.

Description: Many life insurance companies that issue participating policies follow business practices that they argue allow them a deduction for tax purposes for policyholder dividends in the year prior to actual payment. This article discusses several recent developments related to policyholder dividend accruals, including Revenue Ruling 2011-29 and the New York Life and MassMutual cases, and highlights the four arguments commonly made by the IRS in challenging companies' claimed tax treatment of such dividends.

Description: Small Talk Newsletter, June 2005, Issue No. 24. Last fall, the Internal Revenue Service IRS released Notice 2004-61, 2004-41 I.R.B. 596 October 12, 2004, interpreting the reasonable mortality charge requirement applicable to life insurance contracts under Section 7702 of the Internal Revenue Code.

Description: This article details the IRS' Revenue Ruling 2005-6. This ruling provides formal guidance on how to treat family term riders for purposes of the computational limit calculations in Internal Revenue Code IRC sections 7702 and 7702A i.e., calculations of net single premiums, guideline single premiums, guideline level premiums and 7-pay premiums. From Small Talk Newsletter, June 2005, Issue No. 24.

Description: The traditional defined-benefit (DB) plan is a type of plan structured to provide the greatest degree of retirement income security, designed to pay out a guaranteed retirement income for the life of the retiree (and, when applicable, a beneficiary). However, over the last several decades, the number of private-sector employees covered under these traditional plans has decreased dramatically and been replaced by defined contribution (DC) plans. In contrast, public-sector retirement plans, which are exempt from ERISA, have seen a much smaller decline in DB plans. There are many differences in the private and public sector that likely contributed to this phenomenon, but ERISA and the many amendments to it has been a major factor.

Description: After outlining some of the issues involved in the taxation of life insurance companies, this paper describes the tax consequences of various strategic courses of action by life insurance companies. From Transactions of Society of Actuaries 1981, Vol. 33.

Description: In this paper, the author presents the statutory and regulatory rationale for the Internal Revenue Service, ‘IRS,” position on integration. The author discusses the integration requirements under IRC Section 401a which must be met for a private pension plan to receive favorable tax treatment, including the prohibited discrimination requirement. From the 1982 Transactions Vol. 34.