Earlier this week Green introduced a bill (H.R. 414) that would deem the nondisclosure of corporate-owned life insurance (COLI) of employees an unfair trade practice under the Federal Trade Commission Act. The bill would require employers who purchase COLI on an employee to notify the employee of the name of the insurance carrier and benefit amount within 30 days after the purchase.
For employees already covered by such policies, notice would be required within 90 days of enactment of the bill. For policies on former employees already purchased since 1985, the employer will have one year to provide the notice.
Last April Green introduced a very similar bill, the Life Insurance Employee Notification Act (HR 4551), that would require employers to tell employees and their families whether it has coverage on their lives, and how much, within 30 days of taking out the policy.
Sometimes perjoratively termed “janitor’s insurance,” or “peasant’s insurance”, COLI can be used to fund employee benefits, such as retiree health benefits.
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