LIBRA PARTNER
Important Impacts to Life Insurance Tax Limits: The Consolidated Appropriations Act of 2021
On December 27, 2020, the Consolidated Appropriations Act of 2021 (CAA) was signed into law. The CAA impacts the interest rates used for Definition of Life Insurance (DOLI) testing under Section 7702 of the Internal Revenue Code of 1986, as amended (Code) and Modified Endowment Contract (MEC) testing under Section 7702A of the Code. These industry-wide changes affect all life insurance carriers and went into effect on newly issued policies beginning January 1, 2021.