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New Toastmasters Club Hosted by Warren G. Bender Co.

Warren G. Bender Co. has proudly started a new Roseville Toastmasters Club that meets bi-weekly in our very own classroom! For those that are unfamiliar with what Toastmasters is, a Toastmasters meeting is a learn-by-doing workshop in which participants hone their speaking and leadership skills in a no-pressure atmosphere.

There is no instructor in a Toastmasters meeting. Instead, members evaluate one another’s presentations. This feedback process is a key part of the program’s success.

Meeting participants also give (more…)

Filed under: Classic — Manager @ 11:20 pm April 15, 2014


Captive Insurance Fronting: Why is it important?

In its most common form, a commercial insurance company (“fronting company”), licensed in the state where a risk to be insured is located, issues its policy to the insured. That risk is then fully transferred from the fronting company to a captive insurance company through a reinsurance agreement, known as a fronting agreement. Thus, the insured obtains a policy issued on the paper of the commercial insurance company. However,  financially, the risk of that coverage resides with the captive insurance company.

There are several business reasons for this type of fronting arrangement:

-The need for a licensed carrier to issue the insurance policy for particular risk.
-The need for a carrier with a minimum AM Best rating and/or the ability to meet other financial strength measures to issue the insurance policy for a particular risk.
-The potential ability to achieve tax deductibility of premiums by the insured through successful risk-shifting.

An additional use of fronting exists where the captive, usually a single parent captive, serves as the fronting company and issues a policy directly to the insured parent company. When this happens, the risk is fully reinsured to one or more domestic or foreign reinsurers. Consequently, the fronting captive would not retain any of the risks and the parent company has gained access to the reinsurance market. The reinsurers would not have been legally able to write the risk directly.

The fronting company will require reimbursement by the captive insurance company of all costs related to the fronted policies it issues plus payment of a fee. Costs passed through typically include commissions, premium taxes, costs of guarantee fund participation and sometimes claims administration and underwriting costs. Costs and fees may be as low as 6% or as high as 30% of gross premiums paid by the insured. As the fronting carriers role varies, so too does the percentage of premium required for the fronting company by the participant.

The fronting company will almost always require collateral to secure the captive’s obligations to the fronting company under the fronting agreement. Collateral takes one of three forms: captive funds withheld by the fronting company, a trust agreement funded by investment securities of the captive or a letter of credit issued on behalf of the captive by a bank (usually secured by investment securities of the captive).

Dating back to the hard market days of 2001, captive insurance companies began to experience difficulties in implementing or retaining favorable fronting arrangements. Certain fronting carriers have exited the market, thus requiring existing captives to find new fronting relationships. This has decreased dramatically the number of fronting carriers available to captives. Remaining fronting carriers are more selective, thus making it more difficult for captive insurance companies to locate a fronting company. Finally, the fees charged by the remaining fronting carriers have increase by several points, reducing the margins of the captive insurance companies bearing the risk. The difficulties that captive insurance companies have experienced in finding suitable fronting carriers at cost effective rates is one of the greatest challenges facing the captive insurance industry today.

Filed under: Classic — Manager @ 3:19 am March 18, 2014


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


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