Posts by Bill Hoisington

JUDICIAL DEVELOPMENTS Lincoln COI Class Actions On March 20, four cases in the Eastern District of Pennsylvania were consolidated into a single consolidated class action (Case 2:17-cv-00837). Interim Class Counsel has 30 days from March 20 to file a Consolidated Class Action Complaint. The four cases that were consolidated were: Bharti R. Bharwani, et al.…

TAX DEVELOPMENTS Treasury Department Report on Tax Treatment of Life Insurance Inside Buildup In September 2016, the Treasury Department released a report titled The Tax Expenditure for Life Insurance Inside Buildup (the “Report”). According to the Report, the Joint Committee on Taxation (JCT) recently changed its position to no longer include the deferral or exclusion…

JUDICIAL DEVELOPMENTS Cost of Insurance Litigation – Palumbo v. Nationwide On January 9, a judge in the United States District Court for the District of Connecticut denied Nationwide Life Insurance Company’s motion to dismiss a complaint brought by an insured (William Palumbo) and the insured’s relative (Laura Palumbo) who served as the trustee of a…

REGULATORY DEVELOPMENTS IRS Private Letter Rulings that Business Trust Portfolio Composed of Underlying Funds Satisfies Investor Control Rules On December 16, the IRS published Private Letter Rulings (PLRs) 201651002 and 201651012. The PLRs are nearly identical, but issued to two separate insurance companies (Y and Z) under a common parent (X). Each insurance company received…

TAX DEVELOPMENTS Increased Potential for Tax Reform President-elect Trump has identified tax reform as one of his administration’s top priorities. With both chambers of Congress being controlled by Republicans, the party seems eager to usher in significant tax reform. During his campaign, Trump touted a plan that he called Donald J. Trump’s Vision. Trump’s plan…

TAX DEVELOPMENTS IRS Guidance Concerning Use of 2017 CSO Tables under Section 7702 On October 19, the IRS released Notice 2016-63, which provides guidance regarding the applicable mortality tables that are permissible in connection with the “reasonable mortality charge” requirement of IRC § 7702(c)(3)(B)(i). As background, the actuarial qualification for life insurance under IRC §…

REGULATORY DEVELOPMENTS Banking Regulators Report to Congress on Investment Activities of Regulated Financial Institutions On September 8, the FRB, FDIC, and OCC released a report to the Congress and the FSOC on the activities and investments that banking entities may engage in under applicable law. This report was required under Section 620 of the Dodd-Frank…

TAX DEVELOPMENTS IRS Sets Hearing Date for Reportable Policy Sale Proposed Rules On August 23 the IRS issued a notice of hearing on its recent proposed changes relating to the transfer for valuable consideration rules associated with 1035 exchanges of life insurance contracts and other life insurance contract transactions. The hearing is set for September…

REGULATORY DEVELOPMENTS Volcker Rule, Extension of Conformance Period On July 7, the Federal Reserve Board extended the Volcker Rule conformance period with respect to relationships with and investments in foreign and covered funds placed prior to December 31, 2013. The new conformance period extension is until July 21, 2017. This is the final extension permitted…

REGULATORY DEVELOPMENTS IRS Proposes Regulations Clarifying Section 409A Regulations On June 21, 2016, the IRS proposed regulations to clarify Section 409A regulations. The proposed regulations address certain specific provisions of the final regulations (which were published in December 2008) and are not intended to propose a general revision of, or broad changes to, the final…