06.05 – Group Cash Value Insurance Contracts or group Annuity Contracts

A Financial Institution can treat an account that is a group Cash Value Insurance Contract or a group Annuity Contract, and that meets the requirements set out below, as a non-US account until the date on which an amount is payable to an employee/certificate holder or beneficiary, provided the Financial Institution obtains a certification from an employer that no employee/certificate holder (account holder) is a US Person.

A Financial Institution is not required to review all the account information collected by the employer to determine if an account holder’s status is unreliable or incorrect.

The requirements are that:

  • the group Cash Value Insurance Contract or group Annuity Contract is issued to an employer and covers twenty-five or more employees/certificate holders; and
  • the employee/certificate holders are entitled to receive any contract value, and to name beneficiaries for the benefit payable upon the employee’s death; and
  • the aggregate amount payable to any employee/certificate holder or beneficiary does not exceed $1,000,000.