Capitol Financial Group, Inc.
Mission and Organization
Areas of Consultation
    Executive Compensation
    Business Succession
    Wealth Transfer
    Risk Management
    Insurance Company Due Care
Clients and Partners
Reference Library
Institution Consulting
Clients Access
Contact CFG
Legal Information
Areas of Consultation

< Back to Bank Owned Life Insurance
We Offer Comprehensive Services Including:
Executive and director compensation programs require ongoing attention to remain compliant with federal and state banking regulations and true to the purpose for which they were implemented.

Pre-purchase analysis : Regulations generated by the Office of the Comptroller of the Currency (OCC) ensures that purchases of bank-owned life insurance to fund non-qualified plans are appropriate to a bank's needs and do not threaten its safety and soundness. In 1996, the OCC issued bulletin 96-51, updating guidelines for banks on their insurance purchases.

Financial Modeling Due Care: We help the bank justify the compensation for the plan participant as well as the amount of insurance used to fund the plan. Our modeling studies encompass not only the policy, but the insurance carrier selected to underwrite the plan. It ensures that the bank has documented responses to all of the risks associated with the plans as set forth by the regulation: risks to earnings or capital from the transaction; the carrier's ability to pay the death benefit; movements in interest rates; the impact of cash surrender, compliance and price fluctuations.

Implementation: Sample plan documents are provided for review by the bank and its legal counsel. When documents are executed, plan details are communicated to all participants, and all the administrative and regulatory compliance services required to ensure proper implementation are provided.

Annual Monitoring :Non-qualified plans must be reviewed regularly to ensure they remain in compliance with principles of safety and soundness, as well as meet their primary objective, ensuring the covered participant can retain his or her standard of living at retirement. CFG's program of ongoing services is elaborate, to ensure such standards are met:

  • At plan inception, opening and monthly accounting entries for the calendar year of the program are provided. They define current, and project future, values. Each year, updates of monthly projections are provided. If insurance was purchased in connection with the plan, verification of policy cash surrender value balances are provided, so the client's books can be adjusted as necessary. Clients receive an accurate accounting of the insurance assets and benefit liability of their plans on a monthly basis, produced in accordance with generally accepted accounting principles and regulatory accounting principles.
  • Each year, CFG issues a detailed benefits report to plan participants, ensuring the participant is aware of the benefits the bank provides, thereby maximizing the benefit program in terms of employee motivation.

    < Back to Bank Owned Life Insurance

Copyright 2001, Capitol Financial Group, Inc. | All Rights Reserved | Contact Us

photo: clients shaking hands
"The Capitol Financial Group is knowledgeable, trustworthy and extremely easy to communicate with. I found them to always have our best interest in mind. They were very thorough, accurate and creative when designing both our company’s benefit packages and executive wealth transfer planning arrangements."

Bob Shaw, President
Allied Plywood Corporation, Inc.
Executive Compensation Business Succession Risk Management Wealth Transfer