Why Hundreds of Insurance Carriers Hold ICOLI

Hundreds of insurance carriers hold insurance company owned life insurance (ICOLI) as part of their investment strategy. Why?

The answer is simple. ICOLI has the equity return potential of stock, with the tax characteristics of tax-free bonds (tax-deferred gain is converted to tax-free yield if held to maturity), and efficient risk-based capital charges, 0% to 5%.

Because of this, allocating a portion of investable monies to ICOLI is now commonplace amongst insurance companies.

Each ICOLI strategy is unique to the yield goals, investment strategy, and risk appetite of each purchasing carrier. ICOLI investment strategies range from S&P 500 strategies to private equity.

There are several hundred investment strategies available within ICOLI. Investments within ICOLI undergo the providing carrier’s investment due diligence process. The result is that fund managers are scrutinized and must be selected to appear on their ICOLI platforms.

Unlike general account ICOLI, separate account ICOLI is not subject to the claims of the bankruptcy creditors of the issuing carrier.

Why carriers purchase ICOLI through MBS?  We know the marketplace. We make objective ICOLI carrier recommendations and guide our clients based on the principles of competitive ICOLI pricing and long-term pricing fidelity, ICOLI carrier strength and ratings, ICOLI carrier experience in and dedication to the ICOLI marketplace, ICOLI investments offered and their respective investment selection process, and more.

We are here to help you navigate your potential ICOLI investment.

Would you like to explore how ICOLI can affect your company’s portfolio returns? Please reach out.