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Captive Reinsurance
Many Fortune 500 Companies have established Captive insurance subsidiaries to manage and reduce the cost of insurance. Current IRS regulations require that a Captive maintain a significant amount of unrelated third party premium to realize maximum tax advantage. ABC has significant experience assisting clients’ expansion of the Captive’s risk portfolios with personal lines coverages to maximize unrelated third party insurance within the Captive, thereby maximizing the financial advantages of the Captive itself while at the same time delivering valuable benefit services to the Captive insureds.

ABC’s core, differentiating expertise lies with Captive Reinsurance and the set-up and ongoing operation of reinsurance arrangements covering premium from employee benefit plans. ABC, with its deep expertise in Voluntary Benefit program design and implementation as well as Group Insurance in general, is in a unique position to help Fortune 500 clients design and implement benefit plans within the context of their existing Captive structure for maximum financial benefit to the Captive, the Parent company, as well as the insureds within the Captive.

ABC also brings significant experience to the table in bridging the gap between HR and Risk Management to optimize the insurance needs of the parent organization via the Captive. A typical engagement starts with a detailed financial analysis of the Captive and Parent financial and risk structure to determine whether or not expansion of the insurance offerings into personal lines coverage makes sense. Where a financial opportunity exists, ABC then works with the Captive and client’s HR and Risk Management organizations to:

Address any Department of Labor and IRS filing requirements.
Reinsurance design and cash flow projections to support a cost / benefit analysis
Development and negotiation of financial arrangements between the carrier and the Captive
Creation and finalization of the formal reinsurance agreements with the carriers
Program design and implementation of benefit programs through the Captive
Review and evaluation of the ongoing financial arrangement optimization of the program and its financial and risk structure as necessary