AMF Risk Management Solutions (AMF) AMF Risk Management Solutions (AMF) Captive Insurance Proposal for Funding Group Captive Insurance Proposal for Funding Group Medical Stop Loss Insurance For: Medical Stop Loss Insurance For: A.M. Franklin Insurance Agency, Inc. (AMF) 300 Congress Street Quincy, Massachusetts 02169 Telephone: (866) 477- 5263 Fax: (617) 507-6425 Cellular: (617) 645- William G. McKelvey President [email protected]www.amfrms.com
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AMF Risk Management Solutions (AMF) Captive Insurance Proposal for Funding Group Medical Stop Loss Insurance For: A.M. Franklin Insurance Agency, Inc.
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Captive Insurance Proposal for Funding Captive Insurance Proposal for Funding Group Medical Stop Loss Insurance For:Group Medical Stop Loss Insurance For:
AMF Risk Management Solutions AMF Risk Management Solutions Unique Stop Loss Business OfferUnique Stop Loss Business Offer
Traditional Stop Loss.Traditional Stop Loss. Stop Loss With Profit Sharing.Stop Loss With Profit Sharing. Innovative Captive Option – Innovative Captive Option –
Bermuda.Bermuda.
All Products/Services written with major All Products/Services written with major A+A+
Insurance Companies.Insurance Companies.
Who Provides the Major Services Under Who Provides the Major Services Under
the AMF Risk Management Solutions the AMF Risk Management Solutions Program?Program?
Insurance companies with an “A+” Insurance companies with an “A+” Best Rating.Best Rating.
The Marchmont Insurance The Marchmont Insurance CompanyCompany – Subsidiary of BF&M, – Subsidiary of BF&M, Bermuda’s largest health insurance Bermuda’s largest health insurance underwriter for citizens of Bermuda. underwriter for citizens of Bermuda. “A” Best Rating.“A” Best Rating.
Driving Healthcare Cost Down….Driving Healthcare Cost Down….The Need for Insurance CaptivesThe Need for Insurance Captives
To foster more healthcare competition
A. The D.O.L. is encouraging captive formations to fund employee benefits.
Well managed healthcare programs funded through captives assist employers in controlling healthcare costs.
Captives help stabilize reinsurance rates by offering additional capacity to underwrite risk.
To reward brokers, agents & consultants for the design and implementation of well managed healthcare programs for employers.
The AMF Risk Management The AMF Risk Management Solutions Solutions
Captive Program Captive Program
Operates Like Conventional Stop Loss Operates Like Conventional Stop Loss from the Employer’s Stand-Point. from the Employer’s Stand-Point.
Marchmont’s “Protected Cell” Marchmont’s “Protected Cell” Captive serves as the vehicle for Captive serves as the vehicle for Producers to share profits/assume Producers to share profits/assume risk.risk.
Captive Risk: Producer takes as little as 25%, or as great as 80% of Non-Insurance Company portion of $500,000 corridor; AMF takes the remainder (if any).
Lifetime Max.: $1,000,000 Per Person Per Year recommended.
* Set at this level for 2008 treaty year. May vary in future years.
$500,000$500,000**
No outside reinsurance on first $1,000,000. Our No outside reinsurance on first $1,000,000. Our carriers both front and reinsure.carriers both front and reinsure.
PPO Database – over 2,200 networks evaluated by PPO Database – over 2,200 networks evaluated by AMFRMS for discounted rates.AMFRMS for discounted rates.
Aggregate only stop loss (wrap) available over other Aggregate only stop loss (wrap) available over other insurers “high deductible” major medical plans.insurers “high deductible” major medical plans.
Aggregate only stop loss available over self-insured Aggregate only stop loss available over self-insured dental plans with more than 50 employee participants.dental plans with more than 50 employee participants.
(Claims above the $500,000 corridor)(Claims above the $500,000 corridor)
VII. Profits from $500,000 corridor (III – IV – V + VI)VII. Profits from $500,000 corridor (III – IV – V + VI) $ $ 195,000.00195,000.00
Total Estimated Profits as a % of GWPTotal Estimated Profits as a % of GWP 19.5% 19.5% GWPGWP
AMF Risk Management Solutions Medical Stop AMF Risk Management Solutions Medical Stop Loss Risk Sharing Captive Program ProjectionsLoss Risk Sharing Captive Program Projections
* Producer can assume 25% to 80% of risk. 80% of risk would * Producer can assume 25% to 80% of risk. 80% of risk would generate generate
an estimated Producer Profit/Loss of:an estimated Producer Profit/Loss of:
15.6% GWP15.6% GWP
AMF Risk Management Solutions Medical Stop AMF Risk Management Solutions Medical Stop Loss Risk Sharing Captive Program ProjectionsLoss Risk Sharing Captive Program Projections
Illustration # 2Illustration # 2
50% GWP Loss Ratio50% GWP Loss Ratio
I. Gross PremiumsI. Gross Premiums $ $ 1,000,000.001,000,000.00
II. Program Expenses (37.5%) (Commissions 15%; Taxes 3%; II. Program Expenses (37.5%) (Commissions 15%; Taxes 3%; Fronting 5%; Block Cover 4.5%; MGU 10%)Fronting 5%; Block Cover 4.5%; MGU 10%)
$ $ (375,000.00)(375,000.00)
III. Net PremiumsIII. Net Premiums $ $ 625,000.00625,000.00
(Claims above the $500,000 corridor)(Claims above the $500,000 corridor)
VII. Profits from $500,000 corridor (III – IV – V + VI)VII. Profits from $500,000 corridor (III – IV – V + VI) $ 95,000.00$ 95,000.00
Total Estimated Profits as a % of GWPTotal Estimated Profits as a % of GWP 9.5% 9.5% GWPGWP
* Producer can assume 25% to 80% of risk. 80% of risk would * Producer can assume 25% to 80% of risk. 80% of risk would generate generate
an estimated Producer Profit/Loss of:an estimated Producer Profit/Loss of:
7.6% GWP7.6% GWP
AMF Risk Management Solutions Medical Stop AMF Risk Management Solutions Medical Stop Loss Risk Sharing Captive Program ProjectionsLoss Risk Sharing Captive Program Projections
Illustration # 3Illustration # 3
65% GWP Loss Ratio65% GWP Loss Ratio
I. Gross PremiumsI. Gross Premiums $ $ 1,000,000.001,000,000.00
II. Program Expenses (37.5%) (Commissions 15%; Taxes 3%; II. Program Expenses (37.5%) (Commissions 15%; Taxes 3%; Fronting 5%; Block Cover 4.5%; MGU 10%)Fronting 5%; Block Cover 4.5%; MGU 10%) $ $
(375,000.00)(375,000.00)
III. Net PremiumsIII. Net Premiums $ $ 625,000.00625,000.00
(Claims above the $500,000 corridor)(Claims above the $500,000 corridor)
VII. Profits (Loss) from $500,000 corridor (III – IV – V + VI)VII. Profits (Loss) from $500,000 corridor (III – IV – V + VI) $ $ (55,000.00)(55,000.00)
Estimated Profits (Loss) as a % of GWPEstimated Profits (Loss) as a % of GWP (5.5%) (5.5%) GWPGWP
* Producer can assume 25% to 80% of risk. 80% of risk would * Producer can assume 25% to 80% of risk. 80% of risk would generate generate
a estimated Producer Profit/Loss of:a estimated Producer Profit/Loss of:
(4.4%) GWP(4.4%) GWP
AMF Risk Management Solutions Medical Stop AMF Risk Management Solutions Medical Stop Loss Risk Sharing Captive Program ProjectionsLoss Risk Sharing Captive Program Projections
Illustration # 4Illustration # 4
85% GWP Loss Ratio85% GWP Loss Ratio
I. Gross PremiumsI. Gross Premiums $ $ 1,000,000.001,000,000.00
II. Program Expenses (37.5%) (Commissions 15%; Taxes 3%; II. Program Expenses (37.5%) (Commissions 15%; Taxes 3%; Fronting 5%; Block Cover 4.5%; MGU 10%)Fronting 5%; Block Cover 4.5%; MGU 10%) $ $
(375,000.00)(375,000.00)
III. Net PremiumsIII. Net Premiums $ $ 625,000.00625,000.00
(Claims above the $500,000 corridor)(Claims above the $500,000 corridor)
VII. Profits (Loss) from $500,000 corridor (III – IV – V + VI)VII. Profits (Loss) from $500,000 corridor (III – IV – V + VI) $ $ (255,000.00)(255,000.00)
Estimated Profits (Loss) as a % of GWPEstimated Profits (Loss) as a % of GWP (25.5%) GWP(25.5%) GWP
* Producer can assume 25% to 80% of risk. 80% of risk would * Producer can assume 25% to 80% of risk. 80% of risk would
generate an estimated Producer Profit/Loss of:generate an estimated Producer Profit/Loss of:Approximately Approximately
(7.50%) GWP(7.50%) GWP
AMF Production AMF Production RequirementsRequirements
Traditional Stop Traditional Stop Loss SourceLoss Source