What is ICOLI?
ICOLI (Insurance Company Owned Life Insurance) is a form of corporate owned life insurance utilized by insurance companies. Like other forms of corporate and bank owned life insurance (COLI, BOLI), ICOLI is an institutionally priced corporate life insurance asset used to informally finance employee benefit expenses.
ICOLI is a well-established and accepted practice, with more than $60 billion in ICOLI assets held by over 125 U.S. insurance companies. A properly designed ICOLI program delivers tax-advantaged earnings, favorable risk-based capital treatment, and reduced earnings volatility — while helping carriers informally fund executive and employee benefit obligations.
How an ICOLI Program is Structured
An ICOLI program is typically structured with the insurance company as both the owner and beneficiary of the ICOLI policies, and a select group of consenting senior employees as the insureds. ICOLI programs can be designed with general account, separate account, or hybrid structures — including Insurance Dedicated Fund (IDF) and stable value features.