Page:United States Statutes at Large Volume 120.djvu/1054

 PUBLIC LAW 109–280—AUG. 17, 2006

120 STAT. 1023

(within the meaning of subsection (a) or (b) of section 52). ‘‘(4) NOTICE AND CONSENT REQUIREMENTS.—The notice and consent requirements of this paragraph are met if, before the issuance of the contract, the employee— ‘‘(A) is notified in writing that the applicable policyholder intends to insure the employee’s life and the maximum face amount for which the employee could be insured at the time the contract was issued, ‘‘(B) provides written consent to being insured under the contract and that such coverage may continue after the insured terminates employment, and ‘‘(C) is informed in writing that an applicable policyholder will be a beneficiary of any proceeds payable upon the death of the employee. ‘‘(5) DEFINITIONS.—For purposes of this subsection— ‘‘(A) EMPLOYEE.—The term ‘employee’ includes an officer, director, and highly compensated employee (within the meaning of section 414(q)). ‘‘(B) INSURED.—The term ‘insured’ means, with respect to an employer-owned life insurance contract, an individual covered by the contract who is a United States citizen or resident. In the case of a contract covering the joint lives of 2 individuals, references to an insured include both of the individuals.’’. (b) REPORTING REQUIREMENTS.—Subpart A of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 (relating to information concerning persons subject to special provisions) is amended by inserting after section 6039H the following new section: ‘‘SEC. 6039I. RETURNS AND RECORDS WITH RESPECT TO EMPLOYEROWNED LIFE INSURANCE CONTRACTS.

‘‘(a) IN GENERAL.—Every applicable policyholder owning 1 or more employer-owned life insurance contracts issued after the date of the enactment of this section shall file a return (at such time and in such manner as the Secretary shall by regulations prescribe) showing for each year such contracts are owned— ‘‘(1) the number of employees of the applicable policyholder at the end of the year, ‘‘(2) the number of such employees insured under such contracts at the end of the year, ‘‘(3) the total amount of insurance in force at the end of the year under such contracts, ‘‘(4) the name, address, and taxpayer identification number of the applicable policyholder and the type of business in which the policyholder is engaged, and ‘‘(5) that the applicable policyholder has a valid consent for each insured employee (or, if all such consents are not obtained, the number of insured employees for whom such consent was not obtained). ‘‘(b) RECORDKEEPING REQUIREMENT.—Each applicable policyholder owning 1 or more employer-owned life insurance contracts during any year shall keep such records as may be necessary for purposes of determining whether the requirements of this section and section 101(j) are met.

VerDate 14-DEC-2004

26 USC 6039I. Regulations.

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