Wealth Building Participation Structures

Maximizes income and cash flows, and manages loss ratios appropriately. The retrospective concept allows dealerships to participate in a portion of the underwriting profits while assuming no risk. Reserves are held while allowing the dealer to receive a percentage of annual underwriting profits as earned (as long as the portfolio is performing positively.) Unlike other participation programs, there’s no annual fee or specialized tax prep required for a retro agreement.

  • No formation costs or capital requirements
  • No annual maintenance costs
  • No risk of re-payment or reimbursement
  • No maximum limit or volume ceiling
  • Not subject to $1.2m premium threshold
  • Underwriting profits paid annually as earned
  • Taxed as ordinary income
  • Dealer owns reinsurance company in Turks & Caicos
    • –Ability to determine Directors & Shareholders
    • –Ability to access earned reserves via dividends or loans
  • Reserves owned / retained by Dealer’s Reinsurance Company
  • Defers Income
  • Taxed as U.S. Small Insurance Co. if annual premium < $1.2m
  • Minimal Formation and Maintenance Cost
  • Ability to reinsure most products

Best used when a long-term approach is preferred. It generates underwriting profit while providing high potential for maximizing compound growth. The dealer owns stock in a reinsurance company with other participants and with this combined economic strength they produce better long-term economic benefits for the dealer along with a monthly ceding methodology that accelerates the investment potential.

  • DOWC is formed in U.S.
  • CLIP policy issued to Dealer’s company
  • Ability to access earned and unearned reserves via dividends or loans
  • Established as a ‘C’ corporation to facilitate the same tax treatment as an actual insurance company.
  • Provides multiple years of tax deferral allowing the dealer time to determine the best, most tax-efficient, use of company profits

The dealer Obligor VSC participation program allows dealers to maintain one hundred percent control of the reserve dollars along with all future liabilities & 100% of the underwriting profits.

  • Dealer retains the cash reserves and drives all returns
  • Insurance policy backs the dealership entity
  • One-time $950 set-up fee w/ no annual renewal fees
  • Same supportive management tools as all our participation structures-On-Line Billing / On-line Reporting / On-line Contract Look-up / On-line Claims Tools
  • Pre-approval required and may require D.O. registration in some states
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To See Which Structure is Best For You, Call Us Today! (770) 517-5085