Life Insurance-Related Bills Further Enhance Wyoming's Appeal as a Premier Situs

The Wyoming Trust Association worked in collaboration with Wyoming lawmakers and the governor during the recently concluded legislative session to secure approval of a pair of life insurance-related bills designed to further enhance Wyoming’s competitiveness and appeal as a premier trust situs.

The first bill, Senate File 0071, reduces the premium tax rate on life insurance premiums over $100,000 from 75 basis points (.75%) to 7.5 basis points (.075%). This premium tax reduction will increase the attractiveness of Wyoming as a situs for placement of so-called private placement life insurance or “PPLI.”  Today, the vast majority of such policies are written in states like Delaware, South Dakota, and Alaska, where premium tax rates range from 10 basis points in Alaska to 0 basis points in Delaware (on premiums over $100,000). Under the previous tax regime, Wyoming attracted very little, if any, policy volume on high-dollar policies.  By making Wyoming’s premium tax more competitive, the expectation is that Wyoming will benefit from the additional premium tax revenue associated with PPLI that has previously gone to other jurisdictions.   

The related, second bill, House Bill 0235, extends the timeframe that insurers have to pay out death benefits on PPLI policies. Wyoming law requires that death benefits be paid out to beneficiaries within 45 days; this bill gives the PPLI issuer, with the policyholder consent,  flexibility to modify the payout options and timeframe for payment of death benefits under a PPLI policy. The bill also permits modifications to the amount and rate of interest paid on death benefits.

As Wyoming considers ways to increase its competitiveness as a jurisdiction, these bills provide significant strides toward that goal, and demonstrate that Wyoming has taken initiative to not only remain, but improve upon, its position as a top trust situs.