What is Insurance Corporate-Owned Life Insurance (ICOLI)?
Insurance company-owned life insurance is a form of life insurance where the insurance company is the purchaser, beneficiary and owner of policies on the lives of select executives. It is usually funded with a single premium deposit. This type of life insurance
is a tax-efficient method for the administering company to help offset the costs of non-qualified executive benefits. ICOLI earnings are based upon a diversified investment portfolio managed by the life insurance carrier or an outside investment manager.
Seeking to Enhance Investment Results with ICOLI
Insurance companies are continuously looking for investments that optimize their risk/return profile with a focus on improving earnings, surplus, and financial strength. These investments solve many business purposes and must comply with complex insurance regulatory requirements. What if the insurance company could improve its investment earnings and maintain or improve its overall investment structure and financial strength?
ICOLI is one of the few vehicles that can help improve tax-adjusted earnings, receive favorable risk based capital (RBC) treatment and enhance the investment choices available to insurers.
Many life, health and P&C companies use ICOLI to help achieve a more diversified investment portfolio and comply with their surplus investment policy guidelines. The interest in ICOLI has increased as the economic environment has left insurers with fewer alternatives to improve their investment results.
Suite of Services to Help Insurance Companies Using ICOLI
Newport’s ICOLI diagnostic evaluates the key elements necessary to structure, implement and maintain an efficient ICOLI program. Utilizing the information gathered in this diagnostic, along with your current goals and objectives, we consult with you on the ideal strategy for your company’s ICOLI program.
We address and provide thorough documentation of the specific action steps and risks that regulators require to be identified prior to the purchase of ICOLI. We also provide ongoing regular reporting to assist in meeting your continuing regulatory requirements.
Newport provides detailed product evaluations and recommendations to assist in selecting the right asset classes and managers. We construct and monitor an efficient mix of eligible investments designed to generate the highest level of expected return for any given level of risk.
Our complete suite of administrative services are designed to reduce the burden on your organization. Specific deliverables include a program implementation timeline, accounting and financial reporting, policyowner services and an annual plan review.
Variable life insurance policies have certain inherent risks, including the possible loss of principal . Risks associated with variable life insurance policies include, but are not limited to, liquidity, market volatility, asset default and investor control tax risk. Additionally, variable life insurance policies ' fees and expenses include, but are not limited to, mortality costs, stable value charges, policy administration fees and asset management fees.
Please refer to your Private Placement Memorandum, Stable Value Agreement and/or Life Insurance Policy for definitions of the terms and/or data included in this report and to better understand the risk and fees associated with these policies. Securities are offered through Newport Group Securities, Inc., 300 Primera Boulevard, Suite 200, Lake Mary, FL 32746. Member, FINRA. Securities in California are offered under the dba Newport Securities Insurance Services. Other non-securities related insurance products may be offered through Newport Group, Inc. Insurance products are designed for institutional investors. Newport Group and its affiliates do not provide tax, legal or accounting advice. Clients should consult their own tax, legal and accounting advisors before making any decisions. No guarantee as to investment results. All investments in securities involve risks including possible loss of principal. Diversification does not ensure a profit or protect against a loss.