These five considerations form the core of a modern ILIT governance process:
1. Data Accuracy and Completeness
Trustees need reliable, up-to-date information to make prudent decisions. Outdated or missing data is one of the most common drivers of fiduciary risk. That’s why it’s critical to gather statements and current illustrations from carriers on an annual basis.
2. Standardized Life Insurance Policy Reviews
Trustees need a repeatable process for assessing overall policy health and evaluating policy performance against the goals and needs of the trust.
3. Documentation and Oversight
There’s a lot for trustees to keep track of. Annual Statements, Illustrations, Premium Payments, Crummey Letters, and other relevant documents must be easily retrievable. A strong system of record protects beneficiaries, owners, and trustees.
4. Risk Identification and Mitigation
Effective governance includes proactively spotting potential issues like underfunding and lapse risk, often with the support of administrative notifications and alerts.
5. Compliance
Trustees must align their processes with institutional guidelines, regulatory expectations, and industry best practices to help ensure they’re mitigating their own risks as trustees.
Annual governance is a fiduciary requirement. Proformex works hard to remove potential risks from your business. Our annual process ensures that trustees and fiduciaries stay compliant, confident, and informed.