sections 817(h), 7702, and 7702A, coverage for 
each such insured shall be treated as a separate 
contract. 
‘‘(B) APPLICABLE
POLICYHOLDER.—For 
purposes of this subsection— 
‘‘(i) IN GENERAL.—The term ‘applica-
ble policyholder’ means, with respect to 
any employer-owned life insurance con-
tract, the person described in subpara-
graph (A)(i) which owns the contract. 
‘‘(ii) RELATED PERSONS.—The term 
‘applicable policyholder’ includes any per-
son which— 
‘‘(I) bears a relationship to the 
person described in clause (i) which is 
specified 
in 
section 
267(b) 
or 
707(b)(1), or 
‘‘(II) is engaged in trades or 
businesses with such person which are 
under common control (within the 
meaning of subsection (a) or (b) of 
section 52). 
‘‘(4) NOTICE AND CONSENT REQUIREMENTS.— 
The notice and consent requirements of this para-
graph are met if, before the issuance of the contract, 
the employee— 
‘‘(A) is notified in writing that the applica-
ble policyholder intends to insure the employee’s 
life and the maximum face amount for which 
the employee could be insured at the time the 
contract was issued, 
‘‘(B) provides written consent to being in-
sured under the contract and that such cov-
erage may continue after the insured terminates 
employment, and 
‘‘(C) is informed in writing that an appli-
cable policyholder will be a beneficiary of any 
proceeds payable upon the death of the em-
ployee. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) EMPLOYEE.—The term ‘employee’ in-
cludes an officer, director, and highly com-
pensated employee (within the meaning of sec-
tion 414(q)). 
‘‘(B) 
INSURED.—The 
term 
‘insured’ 
means, with respect to an employer-owned life 
insurance contract, an individual covered by the 
contract who is a United States citizen or resi-
dent. In the case of a contract covering the 
joint lives of 2 individuals, references to an in-
sured include both of the individuals.’’. 
(b) REPORTING REQUIREMENTS.—Subpart A of part 
III of subchapter A of chapter 61 of such Code (relating 
to information concerning persons subject to special provi-
sions) is amended by inserting after section 6039H the 
following new section: 
‘‘SEC. 6039I. RETURNS AND RECORDS WITH RESPECT TO 
EMPLOYER-OWNED LIFE INSURANCE CON-
TRACTS. 
‘‘(a) IN GENERAL.—Every applicable policyholder 
owning 1 or more employer-owned life insurance contracts 
issued after the date of the enactment of this section shall 
file a return (at such time and in such manner as the 
Secretary shall by regulations prescribe) showing for each 
year such contracts are owned— 
‘‘(1) the number of employees of the applicable 
policyholder at the end of the year, 
‘‘(2) the number of such employees insured 
under such contracts at the end of the year, 
‘‘(3) the total amount of insurance in force at 
the end of the year under such contracts, 
‘‘(4) the name, address, and taxpayer identifica-
tion number of the applicable policyholder and the
type of business in which the policyholder is en-
gaged, and 
‘‘(5) that the applicable policyholder has a valid 
consent for each insured employee (or, if all such 
consents are not obtained, the number of insured 
employees for whom such consent was not obtained). 
‘‘(b) RECORDKEEPING REQUIREMENT.—Each appli-
cable policyholder owning 1 or more employer-owned life 
insurance contracts during any year shall keep such 
records as may be necessary for purposes of determining 
whether the requirements of this section and section 
101(j) are met. 
‘‘(c) DEFINITIONS.—Any term used in this section 
which is used in section 101(j) shall have the same mean-
ing given such term by section 101(j).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 101(a) of such 
Code is amended by striking ‘‘and subsection (f)’’ 
and inserting ‘‘subsection (f), and subsection (j)’’. 
(2) The table of sections for subpart A of part 
III of subchapter A of chapter 61 of such Code is 
amended by inserting after the item relating to sec-
tion 6039H the following new item: 
‘‘Sec. 6039I. Returns and records with respect to employer-owned life insurance 
contracts.’’.