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The Scoop on Rent-a-Captives (aka Segregated Cell Captives)

While there are a number of compelling reasons to establish or become a member in an “owner owned” captive insurance company, a rent-a-captive option should not be overlooked when exploring captives as a risk financing alternative. In fact, the rent-a-captive option (also known as segregated cell captives) can offer a number of advantages that owned programs do not.

In the past decade, the rent-a-captive concept is part of the mainstream of alternative risk-financing methods and can now stand shoulder-to-shoulder with any other captive structure. The main reason for this is the widespread use of segregated cell legislation in most captive domiciles, which allows the rent-a-captive facility to legally segregate the assets and liabilities of each insured using the facility.

Employers considering a captive for the first time should give serious consideration to the segregated cell option, and there are a number of good reasons for that:

– Capital needed to operate the cell will be roughly the same as required for a single-parent captive.

-Entry/Start-up costs are generally much lower when entering into a rent-a-captive vs. establishing your own captive facility.

-Ease of setup and exit are often touted as advantages of a rent-a-captive compared with an owned captive, and that’s certainly the case as far as setup is concerned.

-Some privately held companies have difficulty complying with a regulator’s request for confidential financial information when setting up a single-parent captive. As they won’t be a director of the cell or facility, the same disclosure requirements don’t apply to the users of the rent-a-captive facility.

Some questions to ask when considering a rent-a-captive:

-Who owns the facility, and how long have they been in business?

-Are financials available to review?

-Is there an advisory board my company can sit on to help make service provider decisions? (In an owned program, the employer has a seat on the board and a vote on who can and cannot service the captive)

-Review the participation agreement in detail

-How are the facility’s investments handled?

-How is investment income calculated? (Some structures will not share in investment income while others will)

-How are distributions handled?

-What is the tax status of the cell program?

Segregated cell rent-a-captive companies are now part of the mainstream when it comes to alternative risk financing mechanisms.  Contact Warren G. Bender Co. today to determine if a rent-a-captive facility is the right fit for your risk financing needs.

Filed under: Classic — Manager @ 12:36 am February 20, 2014


Cyber Insurance Helps Target Cover Some of Its Breach-related Costs

On Jan. 10, Target announced it would offer one year of free credit monitoring, identity theft protection and zero liability for the cost of fraudulent charges to all its customers. Offering this is a smart move on Target’s part to protect its credibility and to maintain good customer relationships. But offering all of this isn’t cheap.

According to the Ponemon Institute’s 2013 Cost of a Data Breach study, the average cost of a breached record is $188, which includes both direct and indirect expenses incurred by the organization. Even just the indirect expense of communication—sending customers notification of the incident and setting up a call center for customer inquiries—can cost a lot.

Target has at least $100 million of cyber insurance coverage. If you multiply the number of customers affected by the breach by the average cost of a breached record, the total cost of this massive breach exceeds the limits of its policy. But the insurance will help cover a big chunk of the customer notification and credit monitoring costs, as well as expenses related to hiring a computer forensics investigator, fines and more.

If a data breach happens to your company, how would you pay for the damages? Contact Warren G. Bender Co. to learn more about cyber insurance.

Filed under: Classic — Manager @ 12:27 am


CIG "Agency of the Year" Award Presented to Warren G. Bender Co.

Warren G. Bender Co. was awarded the prestigious honor of “Agency of the Year” at the February 11th Annual CIG Luncheon. Director of Operations, Maggie Bender-Johnson, and Director of Marketing, Donna Abbott, received the award on behalf of the agency. Congratulations to the WGBCO team for their hard work and dedication that helped us reach this accomplishment. Here’s to another successful year in partnership with Capital Insurance Group!

Filed under: Classic — Manager @ 12:24 am


WGBCO Announces a Brand New Service to Make Your Payment Process Easy and Seamless

Warren G. Bender Co. currently offers a Fax draft payment method, whereby a check is created to debit your account.  This process will be discontinued on March 15th, 2014.  Instead, we will be offering a new method which will enable you to enroll for an electronic withdrawal that will come directly out of your bank account.  This new method will expedite your bill payment process and require a onetime enrollment.  It will also give you the peace of mind that your payment will be made seamlessly.  In addition, Fax drafts take about 2-5 days to process, whereas an electronic debit usually processes within 2 days.  It will eliminate the concern whether your payment was processed or not.  If you are interested in learning more about this new streamlined electronic service, please contact our office at 916-380-5300.

Note:  You may need to contact your bank to ensure they allow ACH debits from your account.

Filed under: Classic — Manager @ 11:46 pm February 19, 2014