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