LRA Updates

REGULATORY DEVELOPMENTS House Financial Services Hearing – Regulators to Pause Major Rulemakings until 2025 On November 20 the House Financial Services Committee held a hearing entitled “Oversight of Prudential Regulators.” Witnesses included Michael Barr (FRB Vice Chairman), Martin Gruenberg (FDIC Chairman) and Michael Hsu (OCC Acting Comptroller). Of note, during the session, the banking regulators…

ACCOUNTING DEVELOPMENT Article on BOLI Surrender and Redeploy Considerations On October 9 professionals from RSM US published an article on Insurance Newsnet, titled BOLI, bonds and banks: Accounting for early surrender. Since the recent increases in interest rates, many banks have considered surrendering recently purchased (i.e., prior to the run up in interest rates) BOLI…

REGULATORY DEVELOPMENTS FRB Vice Chair for Supervision – Remarks on Status of Basel III Endgame On September 10 the FRB Vice Chair for Supervision, Michael S. Barr, delivered a speech at the Brookings Institution. His comments focused on Basel III Endgame and capital surcharges for G-SIBs. Noteworthy statements include ● He will recommend a re-proposal…

JUDICIAL DEVELOPMENTS NY Premium Refund Litigation On August 8 the US Court of Appeals (Second Circuit) affirmed a prior District Court ruling in a case alleging that the insurer (Lincoln Life & Annuity of New York) should be obligated to refund part of a planned, annual premium paid into a universal life insurance policy prior…

JUDICIAL DEVELOPMENTS Court Dismisses NQDC Plan Participants’ Lawsuit Versus FDIC On July 12 the US District Court (Northern California) granted the FDIC’s motion to dismiss a lawsuit brought on behalf of a group of former First Republic Bank employees that were participants in a Deferred Compensation Plan. This lawsuit was interesting because the Plaintiffs staked…

JUDICIAL DEVELOPMENT Supreme Court Affirms IRS Position Regarding Life Insurance Owned by a Closely Held Corporation On June 6 the Supreme Court of the United States unanimously ruled in favor of the IRS in an estate tax challenge (see Connelly v. United States). As a result, the Supreme Court determined that life insurance proceeds received…

REGULATORY DEVELOPMENTS Re-Proposed Rule Regarding Incentive-Based Compensation Arrangements On May 3 the FDIC approved a Notice of Proposed Rulemaking on Incentive-Based Compensation Arrangements. This is largely a re-proposal of a 2016 proposed rule, with some additional discussion in the preamble. The OCC and other regulatory agencies also approved the re-proposal; however, not all of the…

We did not identify any subjects warranting coverage in our monthly LRA Update.

TAX DEVELOPMENT Biden Budget Proposal On March 11 the Biden Administration released its budget for Fiscal Year 2025. The Treasury Department also released its General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals (so-called “Greenbook”). This year’s materials included several budget proposals that have been put forth in prior years, including an increase in…

TAX DEVELOPMENTS Senate Finance Committee Report on Private Placement Life Insurance On February 21 Senate Finance Committee Chairman, Ron Wyden (OR) issued a press release and a Democratic Staff Investigation report detailing the findings of their investigation into the Private Placement Life Insurance (“PPLI”) marketplace. We covered his announced intentions to investigate this industry in…