Pre-Implementation Analysis

OCC Bulletin 2004-56 mandates that, due to the uniqueness and complexity of BOLI transactions, banks purchasing BOLI should conduct a thorough analysis (Pre-Implementation Analysis) to ensure that informed decisions are being made consistent with safe and sound banking practices. The Bulletin outlines nine key steps to follow:

  • Determine the need for insurance
  • Quantify the amount of insurance needed
  • Vendor selection
  • Carrier selection
  • Review of characteristics of available insurance products
  • Determine reasonableness of compensation
  • Analyze associated risks and bank’s ability to respond to those risks
  • Evaluate alternatives
  • Document decision