October 23,2004

Baucus Finance Committee Hearing Statement on Company-Owned Life Insurance

Statement of U.S. Senator Max Baucus
Finance Committee Hearing on Company-Owned Life Insurance

I commend the Chairman for holding today’s hearing on company-owned life insurance
(COLI). As has been noted, the Finance Committee ordered the pension bill reported on September
17. On that day, and again at the markup of the JOBS bill on October 1, the Committee has
confronted the issue of company-owned life insurance.

It’s been many years since Congress chose to exclude life insurance proceeds from taxable
income. The uses of company-owned life insurance have certainly evolved since then. Congress
has acted to address perceived abuses in this area, particularly to restrict the deduction for interest
on repayment of policy loans. Some among us feel strongly that abuses remain. Others feel just as
strongly that current COLI practices are valuable to companies and their employees.

Mr. Chairman, it is plain that we will need to work out a resolution for this issue. I hope that
today’s hearing can contribute to that end. I look forward to working together to see that the
Committee can reach an agreeable solution to this challenge.