What Is a Qualifying Insurance Policy?

An insurance policy issued by an insurer that is not a related party of the reporting entity, if the proceeds of the policy:

• Can be used only to pay or fund employee benefits under a defined benefit plan;
• Are not available to the reporting entity’s own creditors (even in bankruptcy) and cannot be paid to the reporting entity, unless either:
  • The proceeds represent surplus assets that are not needed for the policy to meet all the related employee benefit obligations; or
  • The proceeds are returned to the reporting entity to reimburse it for employee benefits already paid.