Executive Benefits distributes product through brokers that specialize in non-qualified
executive benefits. We define "specialized" as follows:
Firms that spend 100% of their time focused on non-qualified benefit plan market,
or have a division that spends 100% of their time in the market.
Firms that have an experienced marketing force in executive benefits sales.
Firms with their own design departments capable of running our illustration software
so that they can model the liability of the plan design and corresponding asset
initially and at least anually thereafter.
Firms that have their own executive benefit administration system, or have partnered
with a third party vendor that we have approved.
Firms that have staff that focus on insurance processing.
Firms that have someone who reviews funds and fund offerings with the clients
to select the appropriate fund choices for a given plan.
Firms that stay abreast of the specialized regulatory environment under which
Executive Benefits operates, including COLI Best Practices Act, Top Hat Rules, etc.
Currently, we have a limited number of specialty brokers in the US who meet our
criteria, all of which are external brokers to Lincoln. If a new broker comes to
us and they meet most of the seven criteria above and show us a plan to meet all
within a specific period of time, we will consider doing business with them. Otherwise,
we team them up with one of our 14 preferred distribution partners.
Preferred Client Case
Non-qualified executive benefit plans generally work best for public companies organized
as C Corporations. The reason for this is the separation between the individual
employee and the owner. Non-qualified plans generally do not work well for S Corporations,
Asset and Participant Size. Our preferred minimum case size is
$500k in first-year premium and 15 lives. Executive Benefits cases are generally
aggregately funded which means the amount of premium is spread evenly across the
lives. Our minimum case size is $100k and three lives, but these cases require full
underwriting, extra scrutiny of case design, etc. We prefer to avoid cases of this
size, but will consider them. Our products are designed to accomodate cases from
$500k to $1 billion.
Special Underwriting Considerations. Besides the asset and participant
size mentioned above, each case using Executive Benefit's COLI products must obtain
a preliminary underwriting offer before applications are taken. To obtain a preliminary
underwriting offer, the broker will present the following:
Estimated number of eligible participants.
Expected number of lives to be covered by insurance.
Type of plan design.
Sponsoring company name.
Financials if a private company. (We complete a financial underwriting of each
company that purchases our policies. Generally, if the company is public, we can
use standard financial services databases to do our underwriting. If they are private,
they will need to provide certain audited financial statements for underwriting