BOLI

That stands for Bank Owned Life Insurance. Banks have taken out insurance policies on some of their employees. And we're not talking about a little insurance. JPMorgan has $10.4 billion of insurance. As of last year, the four biggest banks - JPMorgan Chase, Bank of America, Wells Fargo and Citigroup -held over $53 billion. This insurance is supposed to be held on key employees, but when you look at the numbers, it seems as though the definition of "key employee" is quite broad.

It gets worse, as the banks need not cancel the policy if the employee leaves the bank. There are cases where several banks hold policies on the same person. And then there's the matter of taxes. Both the buildup in the cash value of the policy over time and the payment of the death benefit are tax-free income to the bank.

The situation appears to be so important to the bank that JPMorgan is the assignee for Patent number 5.806.042 titled “System for Designing and Implementing Bank Owned Life Insurance (BOLI) With a Reinsurance Option.”