BOLI Financing Strategies & Annual Review

Bank Owned Life Insurance (BOLI) is not new. In fact, many banks have already purchased BOLI to finance benefit plan costs, i.e. supplemental plans, medical coverage, and pre/post-retirement life insurance. As stated in OCC Bulletin 2004-56; “…BOLI can provide attractive tax-equivalent yields to help offset the rapidly rising cost of providing employee benefits.” Most bank BOLI portfolios have the opportunity to increase both ROI and credit quality with new products available today, thereby significantly improving the bank’s bottom line.

Although BOLI can be an excellent way to offset benefit plan costs, proper care must be taken by bank management and directors to be sure that a BOLI portfolio is properly implemented and managed consistently to comply with regulatory guidelines and meet bank objectives.



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Analysis Benefit Plans Financing Strategies Regulatory Compliance & Administration	BOLI Financing Strategies & Annual Review Bank Owned Life Insurance (BOLI) is not new. In fact, many banks have already purchased BOLI to finance benefit plan costs, i.e. supplemental plans, medical coverage, and pre/post-retirement life insurance. As stated in OCC Bulletin 2004-56; “…BOLI can provide attractive tax-equivalent yields to help offset the rapidly rising cost of providing employee benefits.” Most bank BOLI portfolios have the opportunity to increase both ROI and credit quality with new products available today, thereby significantly improving the bank’s bottom line. Although BOLI can be an excellent way to offset benefit plan costs, proper care must be taken by bank management and directors to be sure that a BOLI portfolio is properly implemented and managed consistently to comply with regulatory guidelines and meet bank objectives.