Periodically auditing an existing COLI portfolio can mean reducing risk and significantly improving earnings over time. Many credit unions, however, do not review these contracts regularly.
For credit unions that are investing in traditional securities, current accounting treatment now requires mark-to-market accounting and volatility can directly impact net income.
Credit union-owned life insurance (CUOLI/COLI) is the best “otherwise impermissible investment” for your credit union. Using CUOLI in your CU can solve major issues from narrowing margins to employee retention.
Under the National Credit Union Administration (NCUA), Section 20 and Section 21 allow credit unions to contribute to strategies outside of typically permissible investments CUOLI/COLI and CDAs.