Employer-Owned Life Insurance Limitation Act - Makes it unlawful for any employer to carry an employer-owned life insurance policy on any employee whose salary is less than $1 million per year.
Makes it also unlawful for any employer to carry an employer-owned life insurance policy not prohibited by this Act for an employee (earning $1 million or more per year) more than 30 days after that employee terminates employment with the employer.
Requirers an employer to notify an employee who is the subject of a non-prohibited employer-owned life insurance policy within 30 days after purchasing it.
Authorizes any employee who is the subject of a prohibited employer-owned life insurance policy (or the employee's spouse or next of kin if the employee is deceased) to commence a civil action in an appropriate U.S. district court to: (1) enjoin the employer from carrying such a policy; and (2) obtain specified damages.
Directs the Comptroller General to study and report to Congress on the incidence of employers carrying employer-owned life insurance policies on their employees, and related matters.
Prescribes criminal penalties for violation of this Act.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3669 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 3669
To prohibit employers from carrying life insurance policies on their
rank and file employees.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 29, 2009
Mr. Gutierrez introduced the following bill; which was referred to the
Committee on Education and Labor
_______________________________________________________________________
A BILL
To prohibit employers from carrying life insurance policies on their
rank and file employees.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Employer-Owned Life Insurance
Limitation Act''.
SEC. 2. PROHIBITION ON EMPLOYER-OWNED LIFE INSURANCE OF MOST EMPLOYEES.
(a) General Prohibition.--It shall be unlawful for any employer to
carry an employer-owned life insurance policy on any employee of such
employer whose salary is less than $1,000,000 per year.
(b) Mandatory Cancellation.--It shall be unlawful for any employer
to carry an employer-owned life insurance policy not prohibited by
subsection (a) for any employee after 30 days after such employee
terminates employment with such employer.
SEC. 3. DISCLOSURE REQUIRED.
Not later than 30 days after the date on which an employer
purchases any employer-owned life insurance policy not prohibited by
section 2(a), the employer shall provide to the employee who is the
subject of the employer-owned life insurance policy a written notice
that contains--
(1) a statement that the employer carries an employer-owned
life insurance policy on the life of the employee;
(2) the identity of the insurance carrier of the policy;
(3) the benefit amount of the policy; and
(4) the name of the beneficiary of the policy.
SEC. 4. CIVIL ACTION.
Any employee who is the subject of an employer-owned life insurance
policy carried by his or her employer in violation of section 2 (or the
spouse or next of kin of such an employee in the case of a deceased
employee) may commence a civil action in an appropriate district court
of the United States--
(1) to enjoin the employer from carrying such a policy; and
(2) to obtain damages in an amount that is the greater of
$500,000 or--
(A) in the case of a deceased employee, 3 times the
amount of any benefit paid or payable to the employer
from the employer-owned life insurance policy; or
(B) in the case of an employee who has not died, 3
times the amount of any benefit that would be payable
to the employer from the employer-owned life insurance
policy if the employee had died on the day on which
such action was commenced.
SEC. 5. DEFINITIONS.
As used in this Act--
(1) the terms ``employer'' and ``employee'' have the
meaning given such terms in section 3 of the Fair Labor
Standards Act of 1938 (29 U.S.C. 203); and
(2) the term ``employer-owned life insurance policy'' means
a life insurance policy purchased by an employer where the
insured is an employee of the employer and the beneficiary is
the employer.
SEC. 6. GAO STUDY.
The Comptroller General shall study the incidence of employers
carrying employer-owned life insurance policies on their employees, the
effect of this Act on such practices, and the number of actions brought
under section 4 during the first 2-year period following the date of
enactment of this Act. In conducting such a study, the Comptroller
General shall consult with the Internal Revenue Service regarding
information on such policies that has been reported to the Service.
Upon conclusion of the study, the Comptroller General shall transmit to
Congress a report assessing the efficacy of this Act in eliminating or
limiting employer-owned life insurance policies.
SEC. 7. EFFECTIVE DATE.
This Act shall take effect 90 days after the date of its enactment.
SEC. 8. CRIMINAL PENALTIES.
Any employer who commits a violation of section 2(a) upon
conviction thereof, shall be deemed guilty of a misdemeanor and shall
be fined $500,000 and imprisoned for up to 1 year.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E2396)
Referred to the House Committee on Education and Labor.
Sponsor introductory remarks on measure. (CR H10073)
Referred to the Subcommittee on Health, Employment, Labor, and Pensions.
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