System for designing and implementing bank owned life insurance (BOLI) with a reinsurance option

• US 5,806,042 A
• Filed: 10/11/1995
• Issued: 09/08/1998
• Est. Priority Date: 10/11/1995
• Status: Expired due to Term

• Current Assignee: Clark Consulting Incorporated, JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: Charles D. Bennett, Warren T. Wamberg, William Franklin Kelly
• Inventors: Wamberg, Warren T., Bennett, Charles D., Kelly, William Franklin
• Primary Examiner(s): Cosimano, Edward R.
• Assistant Examiner(s): Bainbridge, Barton L.
• Application Number:
  US08/540,695
• Time in Patent Office: 1,063 Days
• Field of Search: 395/204, 395/207, 395/230, 395/235, 705/36, 705/4, 705/7, 705/30, 705/35
• US Class Current: 705/4
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

The present invention involves a computer software and hardware system which smoothly integrates the following functions into an integrated computer-based system for designing and administering a BOLI plan for national banks under current federal and state guidelines and financial market constraints. The systems includes determining the highest BOLI premium permitted under OCC Banking Circular 9651, determining insurable interest requirements by accessing a database with the appropriate state'"'"'s insurable interest guidelines, generating performance estimates for the BOLI plan and allocating premium amount by business unit and employee. The system also ensures that the BOLI plan is in compliance with the regulatory requirements for the business unit. In addition, the system reinsures the BOLI plan through a captive insurance company of the financial organization, obtaining policy values for the captive insurance company. Other aspects of the system include verifying, reconciling, consolidating and reporting policy values for the financial organization, and performing administrative procedures for the BOLI plan of the financial organization.

Claims

1. A system for designing and administering a bank owned life insurance plan for a financial organization, comprising:

a. means for determining the highest bank owned life insurance premium permitted under Office of the Comptroller of the Currency banking guidelines

b. means for determining insurable interest requirements by accessing a database with the appropriate state'"'"'s insurable interest guidelines;

c. means for generating performance estimates for said bank owned life insurance plan, wherein said performance estimates are used to ensure compliance with risk-based capital requirements;

d. means for allocating premium amount by business unit and employee, and for calculating regulatory requirements for said business unit and employee, and for ensuring that said bank owned life insurance plan is in compliance with the regulatory requirements for said business unit;

e. means for calculating maximum risks and premium values that can be reinsured through a captive insurance company of said financial organization;

f. means for said captive insurance company to obtain policy values;

g. means for verifying, reconciling, consolidating and reporting policy values for said financial organization; and

h. means for performing administrative procedures for said bank owned life insurance plan of said financial organization.

2. A method for designing and administering a bank owned life insurance plan for a financial organization, the method comprising the steps of:

a. determining in at least one computer a bank owned life insurance premium;

b. determining insurable interest requirements;

c. generating performance estimates for said bank owned life insurance plan, wherein said performance estimates are used to ensure compliance with risk-based capital requirements;

d. allocating premium amount by business unit and employee;

e. calculating regulatory requirements for said business unit and employee;

f. storing said premium amount in a memory of said at least one computer;

g. ensuring that said bank owned life insurance plan is in compliance with the regulatory requirements for said business unit;

h. verifying, reconciling, consolidating in said computer and reporting from said at least one computer policy values for said financial organization; and

i. performing administrative procedures for said bank owned life insurance plan of said financial organization.

3. The method according to claim 2, wherein said bank owned life insurance premium is a highest bank owned life insurance premium permitted under Office of the Comptroller of the Currency banking guidelines.

4. The method according to claim 2, wherein said insurable interest requirements are selected from a database of different state'"'"'s insurable interest requirements.

5. The method according to claim 2, further comprising the step of reinsuring said bank owned life insurance plan.

6. The method according to claim 5, wherein the step of reinsuring said bank owned life insurance plan is performed through a captive insurance company of said financial organization.

7. An apparatus for designing and administering a bank owned life insurance plan for a financial organization, comprising:

a. a first inputting means for inputting employee data;

b. a second inputting means for inputting information from an insurance company;

c. a reporting means; and

d. a processor, said processor connected to said first and second inputting means and said reporting means, wherein said processor accepts employee data from said first inputting means, determines a bank owned life insurance premium and insurable interest requirements, generates performance estimates for said bank owned life insurance plan, allocates premium amount by business unit and employee, calculates regulatory requirements for said business unit and employee, ensures that said bank owned life insurance plan is in compliance with the regulatory requirements for said business unit, accepts policy values from said second inputting means, sends the policy values to said reporting means, wherein said reporting means verifies, reconciles, consolidates and reports the policy values, and said processor performs administrative procedures for said bank owned life insurance plan of said financial organization.

8. The apparatus according to claim 7, wherein said bank owned life insurance premium calculated by said processor is a highest bank owned life insurance premium permitted under Office of the Comptroller of the Currency banking guidelines.

9. The apparatus according to claim 7, wherein said insurable interest requirements are selected from a database of different state'"'"'s insurable interest requirements.

10. The apparatus according to claim 7, wherein said second inputting means further inputs reinsurance information from a reinsurance company, and said processor uses said reinsurance information to reinsure said bank owned life insurance plan.

11. The apparatus according to claim 7, wherein said performance estimates are used to ensure compliance with risk-based capital requirements.