Legislation introduced to resolve Harris Trust issues

Article Abstract:

The ERISA Clarification Act of 1995 was introduced to resolve the issues regarding the treatment of insurer general accounts as plan assets that was raised by the US Supreme Court's decision in John Hancock Mutual Life Insurance Co. v. Harris Trust & Savings Bank. The Court ruled that the life insurance company was an ERISA fiduciary regarding group annuity funds held in the insurer's general accounts. The industry had been operating on the assumption that guaranteed benefit policies were exempt from fiduciary obligations otherwise accompanying plan assets.

Cases, Annuities

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DOL requests information on implications of Harris Trust

Article Abstract:

The Small Business Job Protection Act of 1996 calls for the Department of Labor to promulgate regulations to address problems in life insurance investments by pension plans created by the US Supreme Court's ruling in John Hancock Mutual Life Insurance Co. v. Harris Trust & Savings Bank. The court ruled that insurance is a guaranteed benefit policy only to the extent the insurance carrier has incurred the investment risk. The Department of Labor has called for information regarding the way plan administrators use insurance to fund plans.

Pension Fund Qualification (Tax), Qualified benefit plans

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DOL releases Prop. Regs. on insurance company general accounts

Article Abstract:

US Labor Dept proposed regulations issued in Dec 1997 provide ERISA required guidance concerning fiduciary duty and prohibited transactions rules applied to insurance companies' general account ERISA plan assets. General account policies issued prior to Jan 1, 1999 are the subject of the regulations which should apply to life insurance contracts and pensions despite the use of broader language. Four conditions are listed for variable benefit policies.

Interpretation and construction, Insurance law

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