[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3669 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3669

 To prohibit employers from carrying life insurance policies on their 
                        rank and file employees.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 29, 2009

Mr. Gutierrez introduced the following bill; which was referred to the 
                    Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
 To prohibit employers from carrying life insurance policies on their 
                        rank and file employees.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Employer-Owned Life Insurance 
Limitation Act''.

SEC. 2. PROHIBITION ON EMPLOYER-OWNED LIFE INSURANCE OF MOST EMPLOYEES.

    (a) General Prohibition.--It shall be unlawful for any employer to 
carry an employer-owned life insurance policy on any employee of such 
employer whose salary is less than $1,000,000 per year.
    (b) Mandatory Cancellation.--It shall be unlawful for any employer 
to carry an employer-owned life insurance policy not prohibited by 
subsection (a) for any employee after 30 days after such employee 
terminates employment with such employer.

SEC. 3. DISCLOSURE REQUIRED.

    Not later than 30 days after the date on which an employer 
purchases any employer-owned life insurance policy not prohibited by 
section 2(a), the employer shall provide to the employee who is the 
subject of the employer-owned life insurance policy a written notice 
that contains--
            (1) a statement that the employer carries an employer-owned 
        life insurance policy on the life of the employee;
            (2) the identity of the insurance carrier of the policy;
            (3) the benefit amount of the policy; and
            (4) the name of the beneficiary of the policy.

SEC. 4. CIVIL ACTION.

    Any employee who is the subject of an employer-owned life insurance 
policy carried by his or her employer in violation of section 2 (or the 
spouse or next of kin of such an employee in the case of a deceased 
employee) may commence a civil action in an appropriate district court 
of the United States--
            (1) to enjoin the employer from carrying such a policy; and
            (2) to obtain damages in an amount that is the greater of 
        $500,000 or--
                    (A) in the case of a deceased employee, 3 times the 
                amount of any benefit paid or payable to the employer 
                from the employer-owned life insurance policy; or
                    (B) in the case of an employee who has not died, 3 
                times the amount of any benefit that would be payable 
                to the employer from the employer-owned life insurance 
                policy if the employee had died on the day on which 
                such action was commenced.

SEC. 5. DEFINITIONS.

    As used in this Act--
            (1) the terms ``employer'' and ``employee'' have the 
        meaning given such terms in section 3 of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 203); and
            (2) the term ``employer-owned life insurance policy'' means 
        a life insurance policy purchased by an employer where the 
        insured is an employee of the employer and the beneficiary is 
        the employer.

SEC. 6. GAO STUDY.

    The Comptroller General shall study the incidence of employers 
carrying employer-owned life insurance policies on their employees, the 
effect of this Act on such practices, and the number of actions brought 
under section 4 during the first 2-year period following the date of 
enactment of this Act. In conducting such a study, the Comptroller 
General shall consult with the Internal Revenue Service regarding 
information on such policies that has been reported to the Service. 
Upon conclusion of the study, the Comptroller General shall transmit to 
Congress a report assessing the efficacy of this Act in eliminating or 
limiting employer-owned life insurance policies.

SEC. 7. EFFECTIVE DATE.

    This Act shall take effect 90 days after the date of its enactment.

SEC. 8. CRIMINAL PENALTIES.

    Any employer who commits a violation of section 2(a) upon 
conviction thereof, shall be deemed guilty of a misdemeanor and shall 
be fined $500,000 and imprisoned for up to 1 year.
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