• JAMES R. THOMPSON: Mr. Hertz mentioned that mutuals are using subsidiaries for new products. Could you give me specific examples?
• MR. HERTZ: A number of mutual companies are using subsidiaries to market Universal Life, Variable Life, indeterminant premium products--products essentially on which the question of policyholder dividends is a live issue.
  • At a mutual company, whether any one product has a dividend or not is irrelevant. Under the 1959 act, a mutual company is hopelessly a Phase I taxpayer.
  • If you are going to write non-par business, you want it written in a subsidiary where it can have the tax benefits associated with that kind of business.

1983 - SOA - Strategic Tax Planning, Society of Actuaries - 8p