Regulatory compliance is a foremost concern of most community banks:

The OCC has issued technical bulletin 2000-23 that provides guidelines for banks to ensure that bank purchases of life insurance are consistent with safe and sound banking practices. Technical bulletin 2000-23 includes a determination of incidental purpose, limits on purchase amounts, liquidity, and accounting for the insurance. Regulatory direction on purchase limits is relatively straightforward, no more than 25% of Tier 1 capital and 15% or less with any one carrier. Capitas Executive Solutions will facilitate providing the bank with a Pre-Purchase Analysis to determine how much of it’s Tier 1 Capital Assets can be properly invested into BOLI.

We also feel that for the long term integrity of your plan, OTS RB 32-26 should be followed no matter which regulatory and compliance requirements you must follow.

Office of Thrift Supervision Regulatory Bulletin RB 32-26 (July 31, 2002):

" Institution management and the board of directors cannot rely solely on a third-party analysis of the benefits of BOLI, such as one that a vendor or carrier of the product may prepare. OTS considers this an inappropriate transfer of the fiduciary responsibilities of the board and management to an outsider with a vested interest in selling product."

We require the use of an independent Third Party Administrator (TPA) to provide all due diligence, regulatory compliance, pre-purchase analysis, post-purchase analysis, and ongoing regulatory required plan administration. This TPA must truly be completely independent and separated from the ultimate choice of the funding vehicle implemented in the BOLI Strategy. Please see details of the Pre and Post purchase analysis, Plan Administration Services, and our recommended TPA (including expenses) on the page labeled Third Party Administrator.