The mission of AALU’s Issues Alliance program is to form and strengthen long-term partnerships between carriers, producer groups, industry organizations and agents. By combining our resources to create a unified front, AALU though the Issues Alliance, is able to protect and maintain the integrity of advanced life insurance planning.

The Issues Alliance (IA) is how more than thirty prominent carriers and producer organizations which support AALU’s consistent ability to deliver results on key federal issues impacting advanced life insurance planning. The IA fits squarely into AALU’s strategic vision:

1. Focus on the key issues relating to the core tax treatment of life insurance products and use by 2,000 top producers in AALU’s membership in advanced life insurance planning
   
   
2. Harness the expertise and grasstops strength of AALU members and their active political support for key federal legislators
   
   
3. Broaden grassroots influence and impact on key issues in partnership with IA and industry organizations
   
   
4. Leverage the knowledge and connections of a strong, bi-partisan lobby team
   
   
5. Aggressively champion industry unity, strength and effectiveness on key issues with producer organizations and industry advocacy groups—ACLI NAIFA, NAILBA, and GAMA

The IA is also a tangible and very visible way that the top producers of IA supporters see that they are heavily engaged with AALU in protecting the current federal tax treatment of life insurance products and core streams of producer and carrier income—estate planning, business continuation planning, charitable planning, and qualified and nonqualified retirement planning.

There are three IA levels demarking the degree of annual support and engagement with AALU on key issues:

• Leader: $150,000 to $250,000
• Partner: $100,000
• Partner: $50,000

1. Preparedness for major potential issues in 2009 and 2010: AALU is a co-leader of an industry effort for a coordinated message, grassroots, and advertizing. We have made a substantial, direct contribution to ACLI for the tax challenges campaign.
   
   
2. Estate tax reform: AALU started (2000-1) as one of the few voices for reasonable, sustainable estate tax reform to benefit clients and practitioners. After sustained (2000-8) coalition-building, message development, advertising, and political activity, permanent reform is likely with a $2.5 to $3.5 million exemption and top rate of 45%. We continue urging reunification of estate and gift tax exemptions to further benefit clients and practitioners.
   
   
3. Corporate owned life insurance and deferred compensation: AALU has played a key role at every juncture: defeat of the proposed tax on life insurance death benefits (2003); enactment of legislation codifying COLI best practices and benefits (2006); defeat of proposals which would have had a devastating impact of nonqualified deferred compensation (2002) (2007); and consideration of far more reasonable standards (2007-8). We also impacted 409A legislation (2003-5) and regulation (2006-7).
   
   
4. Optional Federal Charter & Regulatory Reform: AALU was one of the first agent organizations to support the concept of optional federal charter legislation (2006). With stakes multiplied by the financial crisis, we will play a vigorous role on this issue in the year ahead.
   
   
5. Stranger-Originated Life Insurance: AALU was the first (2004) organization to take a strong position against STOLI because its danger to the image and treatment of life insurance products. We helped build industry consensus, played a vital role in developing state legislative solutions (2007), and have contributed (2007-8) to ACLI and NAIFA efforts to enact them.
   
   
6. Response to Bid-Rigging Scandals in Property Casualty Arena—Appropriate Disclosures for Life Insurance Producers: After bid- rigging scandals in the property casualty arena, proposals emerged for broad producer commission disclosure and fiduciary duties. AALU played an instrumental role (2004-5) in developing the concept for appropriate disclosures, building industry unity with ACLI, NAIFA, and NAILBA, and successfully urging adoption by the NAIC.
   
   
7. Grandfathering of Equity Split Dollar Arrangements: For approximately 40 years, there was favorable tax treatment for equity split dollar arrangements in common compensatory and estate planning contexts. When the IRS and Treasury decided (2001-3) to change that tax treatment, AALU played a critical role in successfully advocating a high degree of grandfathering protection for arrangements entered into during the previous four decades.