Pre-Purchase Analysis

  • Determine/Quantify the need for insurance
  • Vendor selection
  • Insurance carrier selection
  • Review the characteristics of the available insurance products
  • Analyze the benefits of BOLI
  • Determine the reasonableness of compensation provided to the insured employee if the insurance results in additional compensation
  • Analyze the associated risks of BOLI and the Bank’s ability to monitor and respond to those risks
  • Safe and sound banking practices:
    • Complexity of the transaction
    • Size of the transaction relative to the Bank’s capital
    • Diversification of credit risk
    • Financial capacity of the Bank
    • Financial capacity of the insurance carrier
    • Bank’s ability to identify, measure, monitor and control the associated risks
  • Accounting considerations