Union, Congressman Want to Force Disclosure of Insurance Policies Taken Out on Employees
He is sponsoring legislation that would force corporations to disclose these corporate-owned life insurance (COLI) policies - also known as "dead peasant" or "janitor's insurance" policies - which allow companies to receive tax-free benefits when their employees die. This can amount to several hundred thousand dollars of tax-free money, which can be used to enhance corporate profits.
The Life Insurance Employee Notification Act (H.R. 4551) would force companies that take out life insurance policies on their employees or their family members to inform the worker and reveal the amount of each policy. The bill also requires employers to notify former employees or family members of any COLI policy dated from Jan. 1, 1985 forward and to tell existing employees of the policies within 90 days of enactment of the legislation.
"The people who should benefit from a life insurance policy should not be the company, but the families of the employees," said Green.
"This bill will stop corporations from hiding these policies and force them to let their workers know that their employer stands to gain hundreds of thousands of dollars if they die unexpectedly, while their survivors receive nothing," said Green. "This legislation is to shine the light of day on corporate practices that employee and consumers may not know."
At a press conference scheduled for tomorrow, Green and the Paper, Allied-Industrial, Chemical and Energy Workers (PACE) International Union will urge Congress to keep the COLI issue alive in the next session and to hold hearings on Green's proposed legislation. They also will encourage the public to contact their representatives to sign on as a cosponsor of H.R. 4551 and to ask congressional candidates whether or not they support the full disclosure of COLI policies to employees.
"Our free enterprise system works, but what our major corporations are doing at the time of their employees' death does not pass the 'smell test,'" said Green. "The LIEN Act protects the American worker from the deceptive practices of large corporations that are trying to make an extra buck from the future deaths of their employees and even their families."
