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Bank's deferred comp - VUL


Guest jppcpa

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Anyone have experience using variable universal life in a bank's deferred comp plan? I think this is a fairly new development in regulatory approval. How is plan structured for matching of asset and liability, etc.?

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Guest wmacdonald
Originally posted by jppcpa

Anyone have experience using variable universal life in a bank's deferred comp plan?  I think this is a fairly new development in regulatory approval.  How is plan structured for matching of asset and liability, etc.?

Yes, we have done a number of plans. The Office of the Controller of the Currency released OCC Bulletin 2000-23, a few months ago,which related to Bank purchases of life insurance. The OCC Bulletin set forth in some detail the guidelines under which national banks may purchase insurance on the lives of its employees. The OCC Bulletin permits such investments within separate accounts in certain circumstances related solely to hedging transactions. The OCC states, "Banks may purchase seperate account insurance products that hold equity securities for the purpose of hedging their obligations under employee compensation and benefit plans.If the insurance cannot be characterized as an effective hedging transaction, the presence of equity securities in a seperate account is impermissible".

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