Who Qualifies?

Participation in BeneRe’s group captive insurance program is offered to U.S. based employers with either a minimum of 2,500 eligible employees or minimum premiums of $300,000 for these policies.

We only work with progressive, premier brokers and consultants with large employer relationships.

How does BeneRe work?

All employee premiums are paid directly to the insurance carrier, which holds the funds to pay all claims throughout the policy year.

BeneRe reinsures 100% of the program but the issuance of policies, handling of customer service and adjudication of claims are all handled by one of the most respected insurance companies in America. Underwriting gains are targeted to range between 10% and 20%, although actual results have been far superior. Because claims experience will vary from year to year, no distributions are guaranteed, however, employers will never face a capital call in the event there is a premium shortfall.

BeneRe Reinsures 100% of participating members’ voluntary benefits.

Contact us to learn more about how this works.

1. Employees enroll in the supplemental benefits program as part of open enrollment. Their payroll deductions are sent to the insurance company that is fronting the program. The employees enjoy the full faith and credit of the carrier fronting the program, meaning there is no financial risk to the employees.

2. Insurance company administrates the program as any other standard program. They issue policies for employees, handle customer service, adjudicate claims, etc.

3. The captive difference is that BeneRe reinsures 100% of the risks from these employer sponsored programs while still allowing all premiums to be held by the insurance company. This means that the insurance carrier holds the dollars until the final claims are paid for the policy period, thus providing extra protection for the employees. Note: All risks from participating employers are aggregated and the resulting loss experience is calculated on a composite basis.

4. Upon policy year end, premiums net of claims and expenses are released to BeneRe and further distributed on a pro-rata basis to all participating plans. Total expenses run 40%, which includes carrier fees, client service, captive management, compliance, broker commissions and taxes, leaving 60% of premiums to pay claims. If claims run at 50%, the employer would receive a distribution at the end of the policy year. If claims ran better or worse than expected; the distributions would be subject to change.

Important Considerations

What is a group captive insurance company?

It is an insurance company that exclusively reinsures the risks of firms belonging to that group. BeneRe is domiciled in Arizona and is regulated by that state’s Department of Insurance (DOI). They monitor BeneRe’s issuance of policies, collection of premiums, disbursement of claims, financial stability and compliance with all regulatory requirements as with any standard insurance company.

What’s the difference between a Single Parent Captive vs. a Group Captive?

The vast majority of large employers own a Single Parent captive and may wish to write these coverages through their controlled insurance company because of the consistently low loss ratios. However, this would represent a prohibited transaction unless the DOL were to grant a specific waiver to that employer. Conversely, the group captive does not require the DOL waiver:

  • BeneRe has removed the employer/employee conflict of interest.
  • Distributions are earned via third-party risk, i.e. the aggregated risk of all employers in the BeneRe group captive.
  • The only policies allowed in the group captive are Accident, Critical Illness and Hospital Indemnity.
  • All distributions must be reinvested in Employee Benefits.

What is the employee value proposition?

Unless employees would receive the same or better coverage at the same or better price, BeneRe will not allow participation in the captive. Analysis is performed on every current VB cost and plan design to calculate the actuarial and benefit value of the program. BeneRe will only allow an employer to join if the insurance program is improved for the employee.

What is the employer value proposition?

Many employers have been uncomfortable with the aforementioned low loss ratios and high commissions associated with voluntary benefits programs. BeneRe has solved for that by transparently disclosing all commissions, expenses, claims and then distributing 100% of all underwriting gains back to employers on a pro-rata basis. There are no contingent bonuses or other misalignments of interest prevalent in the market today.