Standing on the Shoulders of Giants: AALU’s Leadership in Tax Reform


required a little extra coffee for the AALU staff and Board of Directors.

House Republicans had released their long-awaited tax bill, but it wasn’t what the organization expected.

 “The House draft was not, as we would say, ideal,” remembers AALU Chief Operating Officer Marc Cadin, who will take the helm as CEO in September 2018.

Be that as it may, Jeri Turley (who will become AALU’s first female President in 2020) wasn’t worried.

“I actually had a level of confidence and security,” she says. “Having chaired the Government Affairs Committee this year, I realize that AALU gave me a lot of comfort. There is a group of people working for me and my business, passionately driving our priorities with members of Congress.”

She’s referring to AALU’s Ambassador program, made up of members who build deep and strategic relationships with the elected officials who impact the way consumers use life insurance and annuities.

“For the last three years, we’ve worked very hard to educate members of Congress,” echoes Rich DeVita, AALU’s sitting President. “So, when HR 1 was released and included terminal provisions for our industry, we were surprised at the severity of the language. Thankfully, we knew exactly what to do.”


“what to do” was to continue the work that the Board, the AALU team, and its  Ambassadors had begun years before.

  “AALU has spent six decades building relationships on the Hill,” says CEO David Stertzer, who has led AALU since the Reagan administration. “We had really started working on tax reform years ago with the message that life insurance is taxed appropriately. That work, which led to the removal of inside buildup from the tax expenditure list, was a generational achievement.” “We didn’t see a threat to product taxation [during the 2017 discussions] because we took it off the table before tax reform even began,” Chris Morton, AALU’s Senior Vice President of Government

Affairs, continues. “At the 2013 Annual Meeting, we put a stake in the ground and vowed to eradicate inside buildup’s classification as a tax expenditure. In 2015, our efforts were rewarded. The Joint Committee on Taxation made the right decision and removed life insurance from its tax expenditure list–a direct result of AALU’s diligence in making Congress aware that our products were taxed appropriately.”

The AALU team knew there was a probability of major reform under the Trump Administration, and had already begun planning for several possible scenarios. When the framework was released in 2017, the strategy became clear: engage the governing majority to ensure the continued protection of the financial services that millions of Americans depend on.

John Watson, an AALU member for more than 20 years, gives one example:

“Back in 2016,” he remembers. “I was asked by the AALU team to form a relationship with [South Carolina] Senator Tim Scott. Since then, I’ve gotten to know him and his staff extremely well through numerous meetings and exchanges. But the most important thing about all this is that you build a long-term relationship.” That relationship was validated, John says, by an experience he had with Senator Scott during the contentious tax reform debate last year. “I was watching the Senator on TV during his Finance Committee meeting,” he says. “The next thing I knew, he’d left the room, and my cell phone was ringing—it was Senator Scott, asking me, ‘What can I do for you?’ He got my input on what I thought was important to the debate. He lived up to his word.”

Former AALU President Gib Surles has a similar sense of his relationship with House Ways & Means Committee Chairman Kevin Brady.

“What I’ve done with Kevin Brady over the past 18 years has just been to become his friend,” says Surles. “We’ve talked about how life insurance works. We’ve talked about how it affects his constituents.

“I meet this guy 18 years ago who happened to be on Ways & Means,” Surles continues. “Who’d have thunk that when he becomes Chairman of the committee, it’d be right when tax reform was taking place? I like him, and I trust him. He likes me, and he trusts me.

“He has reached out to me over the years to ask me about different pieces of legislation and what they really mean to the life insurance industry.”

Says Armstrong Robinson, AALU’s Vice President of Legislative Affairs:

“The opportunity to engage members like Gib helped us preserve retirement security for millions by battling back the attacks on deferred compensation. The relationships AALU facilitates are unbelievable. My favorite description of working for AALU in tax reform was that the Ambassador program enabled me to stand on the shoulders of giants.”

“AALU has a history of developing deep, longstanding relationships with the people making decisions on Capitol Hill. They have prioritized alignment with industry organizations, and make a point to communicate with members and partners on important issues facing the field and our company. It was a natural choice for John Hancock to support and work closely with AALU during the 2017 tax reform campaign—quite simply, we knew they’d get things done.” – Thomas Samoluk, John Hancock Insurance


 However, Cadin says, there is still work to be done.

“There’s no question that we had positive results, but we still have work to do. The only way for Americans  to get the financial advice they need is through the profession we represent, so we must advocate for policies that are pro-consumer, pro-savings, and pro-security. This is a noble industry, and our products belong in the hands of more people. Luckily, this is where AALU thrives–and I’m excited for the path forward as an offensive voice for this community.”



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AALU Tax Reform Campaign Contributors

M Financial
Pacific Life Insurance Company
Nationwide Financial Lion Street
John Hancock Insurance
Principal Protective Life Insurance Company Lombard International
The Penn Mutual Life Insurance Company LifeMark Partners
Gentry Partners Ltd.