Last month, Marriott International told the Securities and Exchange Commission that it is permanently suspending the payment of premiums on the life insurance policies of its CEO for fear that such payments might violate Section 402 of the Sarbanes-Oxley Act.
In making the announcement in a Form 8-K filing, Marriott took a swipe at the SEC for failing to provide guidance as to whether split-value life insurance arrangements—ones in which two parties agree to share obligations and benefits under a permanent whole life insurance policy—constitute prohibited loans under Section 402. The company had temporarily suspended paying premiums on the life insurance policies in July 2002 in anticipation of clarification from the Commission, which has never been issued.
