Valuation of insurance policies

[Guest death and taxes]

What is everyone doing with tracking the value of an insurance policy on participant (or trust/plan) statements? Our company had always used the value of $1 and then we switched to using CSV but, now it looks like according to Rev Proc 2004-16 we should be using FMV. Of course FMV isn't provided by the insurance company so, now we have a dilemma on how to calculate. Just wondering how everyone else is handling.

[ljr]

We ask the insurance companies to give us a cash surrender value as of the plan year end and use this figure as it is what we'd receive if we sold the policy so consider it fair market value. The written report from the insurance company is good documentation for your file. I usually request cash value information at the same time as PS58 information. Participant statements are another whole matter especially for daily plans as there's no way you'll get the cash values until after the fact. We decided to update for accounting and participant statements annually. I believe the latest Rev. Proc. addressed those policies with "springing" cash values? The policies we're dealing with are the usual type with gradually increasing cash values. I'll be interested to learn what others are doing.