- Structure your own insurance program, including coverage not available in commercial markets
- Share in underwriting profits and investment income based solely on your loss experience
- Develop a turnkey insurance program with a fronting insurance carrier if necessary
- Obtain partial support of your program through United Insurance Company Limited, IRSL’s parent company
- Obtain advice of insurance and reinsurance experts with IRSL
- Stabilize premiums and continuity of coverage
- Explore possible U.S. and Canadian tax benefits
Alternative Insurance
It’s called “alternative insurance”. The Fortune 500 companies have been doing it for years.When insurance costs began to escalate in the 60s and 70s, the business giants set up captive insurance companies in places like Bermuda to help cover their risks. Captive companies buy reinsurance directly from major insurers. They operate at an equivalent of the wholesale level, and can save up to 30 percent on the same insurance purchased from a traditional insurance company.
Big Business found other advantages in captive insurance companies. Those with good loss ratios could invest the surplus premiums, and earn interest on what otherwise would be an insurance company’s profit. For U.S. companies, investment earnings generally would not be taxable until profits were repatriated. For Canadian companies, income from Canadian source risks may be considered Foreign Accrual Property Income (“FAPI”). (U.S. and Canada companies should carefully analyze the application of their
tax laws to their circumstances.)
In addition, they were able to tailor their insurance coverages exactly to their needs, and no longer be dependent on coverages and limits offered by domestic insurance companies. This even included specialized coverage not available in the traditional insurance market. Control of claims administration resulted in greater consistency and
lower defense costs.
Now, you can create your own captive
As a result of changes in Bermuda law regarding segregated accounts, you don’t need the capital of a Fortune 500 company to launch a captive insurance company.
You can receive the same benefits by “renting” facilities within an established insurance company that provides you with the same benefits as a captive. The concept is known in the insurance business as “rent-a-captive.” It is growing rapidly and a large portion of the insurance market today is handled through captive companies.
Rent-a-captive for printers
Large printing companies can especially benefit by establishing a rent-a-captive alternative insurance approach. United Insurance Company Limited of Hamilton, Bermuda, which has served the U.S. and Canadian printing industry’s needs for more than 40 years, has established an insurance company, Independent Risk Solutions Ltd. (IRSL). IRSL can offer you the opportunity of establishing your own insurance captive within IRSL by renting some of its facilities or assets, or both.
Your rent-a-captive can reap the same benefits of lower insurance costs, return on invested premiums and control of insurance coverages as the largest corporations.
Establishing your own company is easy.
If you have staff members responsible for your insurance program, they will be familiar with the rent-a-captive concept, and can call upon Independent Risk Solutions’ experts for any help they need. If you feel lacking in any aspect of running your own insurance company, the IRSL staff can serve as consultants, or even provide you with a turnkey program designed for printing companies.
Your rent-a-captive benefits
Think of rent-a-captive as an office building. You will be renting the space in that building to house your insurance company. The rental is the capital required for your insurance company to operate. You provide the capital, and it is secured in your company’s name. All of its earnings are accrued by your company. You have no financial obligations to other renters or to IRSL should any other companies’ programs suffer losses, or even if IRSL should suffer a loss.
You will save immediately on the cost of your insurance because you will buy reinsurance directly from a major insurer – at the same price a commercial insurance company would pay for it. IRSL is managed by experts who have ready access to the professional reinsurance market.
Premiums are based on your company’s loss experience, not on an average for an insured group. You will have the ability to keep premium costs down through improved risk management control.
Commercial insurers’ costs for administration, brokerage, overhead and company profits in some cases can reach 40 percent of premiums. You should save up to 20 percent by administering the program yourself and eliminating the profit element.
You may use current and surplus premiums for sound investments based on the judgement of your Board of Directors or investment advisors.
You will have complete control in designing your insurance program and setting its limits to fit your company’s specific needs. IRSL’s experts can help you structure your coverages.
United Insurance Company Limited can provide traditional strike insurance, union organizing defense insurance and employment practices liability coverage – designed specifically for printing companies.
Contractual relationships
Typically, three contractual relationships are formed between you and the insurers involved in a rent-a-captive. They include the participation agreement, the insurance policy and the reinsurance contract.
All participants sign a Participation Agreement with IRSL. It sets out the obligations of both parties, including any returns you may be entitled to based on your good experience. Good experience returns will enable you to share in the program’s underwriting profit and investment income.
You may obtain insurance coverage in two ways, directly from IRSL or from a fronting insurance company. A fronting company is necessary for some types of insurance to comply with legal requirements of your jurisdiction. If a fronting insurance carrier is used, premiums are paid to the carrier. It will deduct its expenses, then pay the balance of the premium to IRSL. If insurance is purchased through IRSL, premiums are paid directly to IRSL.
IRSL obtains reinsurance coverage to protect against catastrophic claims above your retention layer. Specific and/or aggregate excess of loss reinsurance will help protect your investment against unusual losses. Because IRSL purchases in quantity, premiums often are less expensive than if you purchased reinsurance on your own.
Independent Risk Solutions Ltd.
Independent Risk Solutions Ltd. is an insurance company established by United Insurance Company Limited of Hamilton, Bermuda which has been in the insurance business for more than 40 years. UIC Limited is dedicated to providing insurance to the graphic communications industry in the United States and Canada.
IRSL services
- Analysis of your company’s benefits in a rent-a-captive
- Expert assistance in establishing your own insurance company
- Assist in the administration of your insurance company, depending upon your needs and experience
- Provide personnel, office space, meeting management, travel, hotels etc. for your company
- Liaison with reinsurance companies, legal and governmental agencies
- Source of supplemental capital for rent-a-captive
- Source of direct insurance designed for the printing industry
- Finance coordination and investment assistance
IRSL fees
Independent Risk Solutions Ltd. earns fees for services contracted by your company. Income from your investments accrues to you. Fees apply to the following contracted services:
- Establishing your company within the rent-a-captive
- Organizing your insurance program
- Rental of a rent-a-captive
- Other fees may be negotiated based on requirements
How do I enroll?
All that is required to begin building your own insurance company is unique insurance requirements and the development of a participation agreement with IRSL.
Our insurance experts will work with you to analyze your needs. If you have questions, or prefer to discuss your needs personally, please call us.
Contacting Independant Risk Solutions
You may contact us by telephone, fax, e-mail or standard mail. Please direct written communications to “IRSL Insurance.”