The Pangburn Group

Regs and Guidance

Life Insurance

Employer owned life insurance continues to be one of the most popular informal funding vehicles for nonqualified benefit plans. It is often used as a standalone benefit to insure key employees who are critical to the success of a business. Regulations governing the proceeds of life insurance policies, as well as split dollar arrangements, are listed below.

The Pangburn Group is not a law firm or accounting firm and does not function as a broker-dealer or investment advisor. Consequently, no portion of the information provided herein should be interpreted as legal, actuarial, accounting, tax, broker-dealer or investment advice. Recipients of this information should consult professional advisors for legal, actuarial, accounting, tax, or investment advice, as applicable, before taking any action based on this information.

Certain Death Benefits Certain Death Benefits	Code Section 101
Certain Exchanges of Insurance Policies Certain Exchanges of Insurance Policies	Code Section 1035
Proceeds of Life Insurance Proceeds of Life Insurance	Code Section 2042
Liability of Life Insurance Beneficiaries Liability of Life Insurance Beneficiaries	Code Section 2206
Certain Amounts Paid in Connection with Insurance Contracts Certain Amounts Paid in Connection with Insurance Contracts	Code Section 264
Annuities; Certain Proceeds of Endowments and Life Insurance Contracts Annuities; Certain Proceeds of Endowments and Life Insurance Contracts	Code Section 72
Life Insurance Contract Defined Life Insurance Contract Defined	Code Section 7702
Modified Endowment Contract Defined Modified Endowment Contract Defined	Code Section 7702A
Treatment of Certain Employer-Owned Life Insurance Contracts Treatment of Certain Employer-Owned Life Insurance Contracts	Notice 2009-48

Treatment of Loans with Below-Market Interest Rates Treatment of Loans with Below-Market Interest Rates	Code Section 7872
Accounting for Post Retirement Split Dollar (Endorsement)Accounting for Post Retirement Split Dollar (Endorsement)	EITF 06-04
Accounting for Post Retirement Split Dollar (Collateral Assignment)Accounting for Post Retirement Split Dollar (Collateral Assignment)	EITF 06-10
Split Dollar Life Insurance Arrangements Split Dollar Life Insurance Arrangements	Notice 2001-10
Split Dollar Life Insurance Arrangements Split Dollar Life Insurance Arrangements	Notice 2002-08
Split Dollar Life Insurance Arrangements Split Dollar Life Insurance Arrangements	Notice 2002-59
Guidance Regarding the Application of Section 409A to Split Dollar Life Insurance Arrangements Guidance Regarding the Application of Section 409A to Split Dollar Life Insurance Arrangements	Notice 2007-34
Split Dollar Life Insurance Arrangements - Final Regulations Split Dollar Life Insurance Arrangements - Final Regulations	Treasury Decision 9092