Change is constant. Process matters. If you’re evaluating bank owned life insurance, you need a framework that is clear, compliant, and easy for leadership to follow. Our BOLI process is designed to help banks move from early evaluation to confident implementation without unnecessary complexity. At Schiff Executive Benefits, we make BOLI implementation easier to understand, easier to present, and easier to manage.
Why This Process Matters
A successful BOLI process helps your bank:
- Offset employee benefit costs
- Support executive benefit liabilities
- Stay aligned with risk and capital considerations
- Give the board a clean path to informed decision-making
Foundation: OCC 2004-56
Every sound BOLI implementation starts with OCC 2004-56. This guidance sets the standard for how banks evaluate risk, document their analysis, and approach bank owned life insurance as a safe and sound asset. We treat OCC 2004-56 as the starting point, not the finish line. That keeps the entire BOLI process focused, defensible, and board-ready.
The 10-Step BOLI Process
Our pre-purchase analysis is built to help bank leadership evaluate structure, risk, pricing, and fit before moving forward.
1. Calculate Employee Benefit Liabilities
Define the benefit costs the BOLI program is meant to offset.
2. Conduct OCC Testing
Measure capital impact, earnings alignment, and insurance-to-capital positioning.
3. Analyze Insurable Interest
Confirm legal eligibility and proper insurable interest for covered lives.
4. Review Risk
Evaluate credit risk, interest rate risk, liquidity risk, and legislative risk.
5. Prepare Financial Models
Run independent projections for yield, surrender outcomes, and cost recovery.
6. Review Carrier Investment Strategy
Assess how the carrier invests and whether that approach fits your bank.
7. Review Policy Characteristics
Compare General Account, Separate Account, and Hybrid Account options.
8. Reverse-Engineer the Product
Build the design around your bank’s goals instead of forcing a shelf product.
9. Negotiate Final Pricing
Work to improve net yield, pricing, and overall policy economics.
10. Support Board Review
Deliver a concise executive summary and due diligence package for approval.
Implementation and Ongoing Support
Approval is not the end of the BOLI process. It is the beginning of proper execution. We support the full BOLI implementation phase, including documentation, employee consent, policy placement, and delivery. After purchase, we continue with annual reviews, carrier monitoring, and updated analysis so your bank owned life insurance strategy stays aligned with the original goal. We also work alongside your existing advisors, including accountants, attorneys, and TPAs, so the process stays coordinated and efficient.
Ready to implement a smarter BOLI strategy?
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Meta Description: Our BOLI process helps banks streamline BOLI implementation with clear steps, OCC 2004-56 alignment, and practical bank owned life insurance guidance.
Learn more: our complete guide to Bank Owned Life Insurance (BOLI).