Risk Management

Why Make a 953(d) Election?

There are a number of reasons why a foreign insurance company would make a so-called 953(d) election.  This article will discuss two of those reasons.

What is a 953(d) Election?

The term “953(d) election” refers to a decision made by a foreign insurance company to be taxed as a United States taxpayer.  For purposes of this discussion, a foreign insurance company is an insurance company incorporated in an off-shore jurisdiction, which is neither licensed, nor engaged in business, in the United States, and can include a captive insurance company.  Typically, a foreign insurance company would not be taxed as a United States taxpayer and would not be required to file a Form 1120-PC with the Internal Revenue Service (IRS).

For the reasons discussed below, a foreign insurance company might prefer to be taxed as a United States taxpayer.  As a result, section 953(d) of the Internal Revenue Code (Code) permits a foreign insurance company to elect to be taxed as a United States taxpayer if certain conditions are met.  Those conditions include the following:

1. The foreign corporation must be a “controlled foreign corporation” (CFC).

2. The foreign corporation would qualify under part I or part II of subchapter L of the Code, if it were a domestic corporation. This simply means that the corporation is an insurance company.

3. The foreign corporation meets the requirements set out by the IRS. The IRS has set out those requirements in Rev. Proc. 2003-47.

4. The foreign corporation makes an election to have section 953(d) apply.

What is a Controlled Foreign Corporation?

As stated above, one of the requirements for making a 953(d) election is that the foreign insurance company is a controlled foreign corporation.  The definition of a CFC is provided in section 957(a) of the Code, as modified by section (b) for insurance companies.  A CFC is any foreign insurance company if more than (i) 25% of the total combined voting power of all classes of stock entitled to vote, or (ii) 25% of the total value of the stock of such corporation, is owned by a United States person on any day during the taxable year of the corporation.

The term “person” includes a United States citizen, a domestic partnership, a domestic corporation, an estate and a trust.  Ownership refers not just to direct ownership, but also includes ownership determined by applying rules of attribution.

How Does a Foreign Insurance Company Make a 953(d) Election?

The requirements for making a 953(d) election are set forth in Rev. Proc. 2003-47, which provides that a foreign insurance company must submit a statement to the IRS of its intention to be taxed as United States taxpayer.  The statement must include a list of all United States shareholders, including the name, address, tax identification number and ownership interest of each shareholder.  The foreign insurance company must agree to update the list on an annual basis.  In addition, the foreign insurance company must agree to pay all taxes as they become due.  An acceptable form of the statement is attached to Rev. Proc. 2003-47 as Appendix A.

In addition, the foreign corporation must meet one of two additional requirements.  The first is called the asset test.  To satisfy the asset test, the foreign insurance company must have (i) a place of business within the United States and (ii) assets equal to 10% of its adjusted gross income for the base year, which are physically located in the United States.  The base year is the taxable year immediately preceding the year in which the election is filed or the year of filing for a new entity.  A foreign insurance company that does not meet the asset test will instead be required to enter into a closing agreement with the IRS and post a letter of credit in an amount equal to 10% its adjusted gross income for the base year, but not less than $75,000 or greater than $10,000,000.

The election is not effective until it has been accepted by the IRS.  However, it will be effective as of the first day of the tax year in which the election was filed.  The election remains in effect until it has been revoked.

The Shareholder of a CFC is Taxed on Subpart F Income

The first reason for a foreign insurance company to make a 953(d) election is that, without the election, certain shareholders of the foreign insurance company will be taxed on the insurance income of the corporation.  So, while a foreign insurance company, which is a CFC, may not be subject to United States income tax, its shareholders are.

Section 951(a)(1) of the Code provides that:

If a foreign corporation is a controlled foreign corporation at any time during any taxable year, every person who is a United States shareholder . . . of such corporation and who owns . . . stock in such corporation on the last day, in such year, on whichcsuch corporation is a controlled foreign corporation shall include in his gross income . . .

(A) his pro rata share . . . of the corporation’s subpart F income for such year . . .

The term “United States shareholder” is defined in section 951(b) as any person who owns 10% or more of the voting power of all classes of stock of the foreign corporation entitled to vote or 10% or more of the total value of shares of all classes of the foreign corporation.  The term “subpart F income” is defined in section 952(a)(1) as “insurance income” (as defined under section 953), and section 953(a)(1)(A) defines “insurance income” as any income in connection with the issuance of an insurance or annuity contract.  In addition, the tax is owed on subpart F income whether it is actually paid to the shareholder or not.

The shareholders of a foreign insurance company will be taxed on the gross premiums paid to the foreign insurance company, if the foreign insurance company is a controlled foreign corporation, as most captives are.  This tax is not only paid on money actually paid to the shareholders, but also on phantom income – i.e. income that is not distributed to the shareholders.  However, shareholders of a foreign insurance company, which is a CFC, will not be subject to this tax if the foreign insurance company makes a 953(d) election.  In that case, the foreign insurance company will be taxed as a United States taxpayer and not as a CFC.

A Foreign Insurance Company is Subject to the Federal Excise Tax

The second reason for a foreign insurance company to make a 953(d) election is section 4371 of the Code, which imposes an excise tax on foreign insurance companies that issue policies covering United States risks.  The tax is very straightforward.  It is a certain percentage of premiums without deductions or set offs.

For property and casualty insurance, the tax is 4 cents on each dollar, or fraction thereof, of premium paid on the policy.  For life insurance, the tax is 1 cent on each dollar, or fraction thereof, of premium paid on the policy.  The tax is also 1 cent on each dollar, or fraction thereof, of the premium paid on a policy of reinsurance.

A foreign insurance company that makes a 953(d) election is treated as a domestic corporation.  It is not taxed as a foreign corporation.  Therefore, premiums paid by a United States person to a foreign insurance company, which has made a 953(d) election, are not subject to the Federal Excise Tax.  This is a great reason for making a 953(d) election.  It means that 100% of the premiums received by the foreign insurance company, including a captive insurance company, will be available to pay claims asserted against the insurance company.  This will provide policyholders with peace of mind that the foreign insurance company will have the ability to pay claims as they become due.

Risk Management

4 Ways to Prevent Claims and Lower Insurance Premiums

You don’t have to go far to find easy and innovative ways to help your business run more profitably.

Look at any millennial… you will see that the entire culture has shifted toward technology. This is no surprise in 2020, but has your risk management strategy made the same shift?

Times are Changing

Are you still holding occasional safety meetings in the breakroom using your VCR? And posting the OSHA sign somewhere you hope your employees see it? It may be time to upgrade.

Times are changing and so should your procedures and trainings to help reduce claims activity. Some of these improvements could possibly lower your insurance premiums as well.

4 Ways to Improve

1. Safe Driver Discount

We’ve all heard or seen the commercials that claim to give you a safe driver discount, if you’re willing to stick a monitoring device in your car.

But did you know that this discount may also be available for your business auto insurance (depending on the state and insurance company). Are you doing that for your commercial cars, vans, and trucks? And for that matter, why don’t you have a camera mounted in those vehicles for extra protection.

2. Security Cameras

If we monitor the front door of our homes by installing a fancy, video doorbell… shouldn’t we also utilize those same devices at work? Installing security cameras in service bays, showrooms, and even office spaces can add an extra layer of security. Which in return could mean a discount on your insurance and offset some of the cost of the equipment.

3. Artificial Intelligence

Artificial Intelligence (AI) was created for more than just an Arnold Schwarzenegger movie! We are living in the age of the Jetsons and it’s time to embrace it. For example, retailers can use online customer support chats to improve efficiency and minimize calls.

4. Security Software

From drones to software that can monitor emails for fraud, embezzlement, and a whole host of other dangers. Cyber-attacks are becoming more frequent, so it is important to have your business protected in all areas.


Risk management strategies can strengthen the value of your company. It can also help you enjoy greater profits. Just simply implement more efficient methods for the same procedures you’ve been using to run your business for years.

For more information or help with your risk management strategy, contact RMC Group at 239-298-8210 or [email protected].

Risk Management

New Jersey Supreme Court Provides Relief To Captive Insurance Company

On December 7, 2020, the New Jersey Supreme Court ruled in favor of Johnson & Johnson on its claim for a refund of insurance premium taxes.  The Supreme Court adopted the decision of the Superior Court of New Jersey Appellate Division, which had overruled a decision of the New Jersey Tax Court denying the refund.

Johnson & Johnson Formed a Captive

Johnson & Johnson (J&J) is a well-known, international pharmaceutical company headquartered in New Jersey.  In 1970, J&J formed a captive insurance company called Middlesex Assurance Company Limited (Middlesex) in Bermuda to, as the Appellate Court found, “secure broader coverage and lower the costs and fees associated with its substantial insurance needs”.  The Appellate Court further found that Middlesex was a “pure or single-parent captive”.  By the time of the lawsuit, Middlesex had been re-domiciled to Vermont.  This meant that Middlesex was authorized to do business only in Vermont and was not authorized to do business in New Jersey.  In addition, as a captive insurance company, Middlesex issued insurance coverage only to J&J.

The Different Types of Insurance Markets

There are generally two types of insurance markets.  The first is the “admitted market”, and the second is the “nonadmitted or unauthorized market”.  An admitted insurer is an insurance company licensed and authorized to do business in a particular state.  This means that it can market its products directly to a resident of the state and can deliver its policies in the state.

An unauthorized insurer is an insurance company that is not licensed in a particular state and, as a result, cannot engage in marketing activities in that state.  While an unauthorized insurer may not do business in a particular state, that does not mean that a resident of that state may not buy insurance coverage from the unauthorized insurer.

The United States Supreme Court long ago held that a person has the constitutional right to buy insurance from any company of their choosing.  Therefore, while an unauthorized insurer cannot do business in a particular state, residents of that state may still procure insurance from that unauthorized insurer.

In addition, there are two types of unauthorized insurance markets.  The first is the “surplus-lines insurance market”, and the second is the “self-procured insurance market”.  The “surplus-lines market” refers to the situation where no insurance company licensed in the state is willing to cover a particular risk.

In that case, a “surplus-lines” policy may be procured through a “surplus-lines broker”, who is licensed and regulated by the state.  The “self-procured market” refers to the situation where an insured procures insurance from an unauthorized insurer directly without the help of a surplus-lines broker.

In the J&J case, the Appellate Court held that the surplus-lines market and the self-procured market are separate and distinct.  It also found that J&J procured insurance from Middlesex without the help of a surplus-lines broker.  Therefore, the insurance coverage that J&J obtained from Middlesex was self-procured insurance.

Insurance Premium Taxes

Most states in the country impose a tax on insurance premiums.  The rates vary by state, but there are very few states that do not impose such a tax.  When the premiums are paid to an admitted carrier, the state looks to the insurance company for the payment of the tax.

When insurance is purchased through a surplus-lines broker, the state generally looks to the broker for the payment of the tax.  When the insurance is self-procured, the state generally looks to the insured for the payment of the tax.

Nonadmitted and Reinsurance Reform Act

The Nonadmitted and Reinsurance Reform Act (NRRA) is a federal statute passed as part of the Dodd-Frank legislation.  The NRRA, which became effective in 2011, provides for the reporting, payment and allocation of insurance premium taxes in connection with the purchase of unauthorized insurance.

Prior to the NRRA, the payment of insurance premium taxes was a complicated and unruly system.  Each state had its own regime and generally taxed insurance premiums covering risks located within the state.  This meant that an insured with locations in multiple states could have reporting and payment obligations in all of those states when it bought insurance in the unauthorized market.  This was a reporting and accounting nightmare.

The NRRA adopted what is known as the “home state rule”.  Under the “home state rule”, only the “home state” of an insured could impose an insurance premium tax on insurance premiums paid to an unauthorized insurer.  The NRRA further defined the term “home state” as the place where the insured has its principal place of business, or the state where the greatest percentage of premium is paid, if 100% of the risk is in a state other than where the insured has its principal place of business.  In addition, an insured’s home state could impose a tax on 100% of the premiums paid by the insured, even if the insured was insuring risks in multiple states.

The NRRA Is Not Mandatory

This brings us back to the J&J case.  As the Appellate Court noted, the NRRA does not require a state to impose a premium tax.  A premium tax can only be imposed by a state’s legislature through the enactment of a statute.  More importantly, the NRRA does not require that a state impose a tax on all premiums paid by an insured, even on those premiums for risks located out of state.  It simply authorizes a state to impose its premium tax on all premiums paid by an in-state insured.

After the enactment of the NRRA, New Jersey amended its insurance premium tax statute to conform to the NRRA.  Prior to the amendment, the New Jersey premium tax statute provided that the insurance premium tax was assessed only on risks located in New Jersey.  The amendment purported to change the insurance premium tax regime by assessing the tax on all premiums paid by a resident of New Jersey, even on premiums paid for risks located in other states.

However, the New Jersey legislature, to put it mildly, screwed up.  As stated above, surplus-lines insurance and self-procured insurance are separate and distinct.  In fact, in New Jersey, they are governed by separate sections of the New Jersey statutes.  The problem is that, when the legislature attempted to amend the premium tax statute, it only added the necessary language to the surplus-lines section.  It did not amend the section that governs the self-procured insurance premium tax.

After the amendment, J&J, as a precautionary measure, paid insurance premium tax on all premiums that it paid to Middlesex, even for risks located outside of New Jersey.  J&J then sued for a refund of taxes that it claimed it had overpaid.

The Appellate Court, in an opinion adopted by the New Jersey Supreme Court, said that it was required to apply the precise language of the statute.  It reiterated that self-procured insurance is not surplus-lines insurance.  And, when the legislature amended the stature by adding language to the surplus-lines section, but not the self-procured section, it was probably an oversight.

However, as a matter of statutory construction, a court cannot give effect to the intent of the legislature, when the language of a statute is clear and unambiguous.  Here, the self-procured section of the statute was left unchanged by the amendment, and it was clear and unambiguous.  It still provided that the insurance premium tax could only be assessed against risks located in New Jersey.

As a result, the Court had no choice but to rule that J&J had overpaid its insurance premium tax and was entitled to a refund.

The moral of the story is read a statute carefully.  Whether you are a legislator writing the law or a person subject to the law, make sure you understand what it says.  And, if you do not understand what a law provides, talk to somebody who does.

Risk Management

Captive Insurance for the Mortgage Industry

The mortgage industry is flourishing.  Low interest rates and migration out of population centers mean more people are looking for homes, which means more people are looking for mortgage loans. However, with increased business comes increased exposure. While record lending may fuel growth, it also adds risk.

Growing Risks and Exposures

The mortgage industry faces many different types of risks.  Whether a business is a lender or a loan originator, there is exposure. The pandemic has caused shutdowns, forcing many businesses to close; some permanently.  This has resulted in layoffs and job losses. The employment rate, which was recently at an all-time low, is now more than double what it was before the pandemic.

When borrowers lose their jobs there is an increased chance of a loan default. Unemployment, underemployment, and a struggling economy can be tell-tale signs that the housing market is going to suffer, if not now soon. And, as a rule of thumb when the housing market struggles, the mortgage industry suffers as well.

In some cases, a loan originator that sold the loan may be required to buy the loan back or refund commissions.  These losses go directly to the business’ bottom line and are in addition to more traditional risks, such as E&O, legal liability, employee-related claims, and reputational risk that any business may face.

A business may be able to insure against some of these risks.  However, not every risk can be covered commercially, and some insurance coverages may be prohibitively expensive.  Fortunately, there is a solution when the commercial market will not do.  And that is a captive insurance company.

A captive is an insurance company formed by a business to cover the risks and exposures of the business.  It enables a business to buy insurance that is tailored to the specific needs of the business.

Coverage Possibilities

RMC has worked with the mortgage industry for many years. We have helped mortgage companies form and manage very successful captive insurance companies.  Some of the risks that a captive can cover are:

  • Administrative Actions – fines and penalties by governing bodies
  • Collections Risk / Clawbacks – based on EPO’s and EPD’s
  • Directors & Officers – exposures for the officers of the company
  • Deductible Reimbursement – reimburse deducible layers of commercial insurance risk
  • Cyber – broad coverage
  • Loss of Key Contract – losses of revenue because of a lost contract (think Fannie/Freddie Mac)
  • Medical Buydown – layer of employee medical insurance should the company meet the requirements
  • Regulatory Change – operational or revenue losses based on regulatory changes
  • Reputational Risk – covers revenue lost due to a reputational exposure

Mixing Commercial Risk into a Captive

A captive insurance company can cover many types of standard commercial risks.  Some risks can be fully covered by the captive, instead of through the traditional commercial market.  Other risks may be better handled by a combination of a captive and a commercial insurer.

E&O, Fidelity Bonds, Professional Liability, Workers Compensation, General Liability, and Property can all be written by the captive or by a combination of a captive and commercial insurer. In some cases, it may make sense to use a fronting carrier where an admitted company is required. In other cases where an admitted carrier is required, a business can reduce premiums by increasing its deductible, and the captive can write a deductible reimbursement policy.

Taking on the Risk of Your Health Insurance

A mortgage company, like any business, has employees.  And, like any business, health care is a major expense.  Most businesses are unaware that a captive can help them reduce their healthcare costs.  By using its captive to assume some of its healthcare risks, a business can significantly reduce its overall spending while still providing its employees with first-class healthcare.

To discuss your options and to see if a captive insurance company is right for your business, contact RMC today at [email protected] or 239-298-8210.

Risk Management

Is a Captive Insurance Company the Solution to Business Interruption?

A restaurant in Washington, D.C. has joined the ranks of businesses suing their insurance company for coverage under a business interruption insurance policy as a result of the COVID-19 pandemic.  The suit claims that the restaurant was forced to close after Washington, D.C.’s mayor issued an order barring sit-down service, thereby limiting its business to take-out and delivery and eliminating 95% of its business.

After closing its business, the restaurant filed a claim with its insurance company.  The carrier denied the claim on the grounds that the restaurant was not forced to close as a result of physical damage to its premises, which is a precondition for coverage under most business interruption policies.  In addition, the carrier claimed that the COVID-19 pandemic falls under a virus exclusion in the policy.

In the suit, the restaurant claims that it was not forced to close as a result of the virus.  Instead, it claims that it was forced to close by reason of the mayor’s order.  In addition, it cites a provision in the policy, which provides coverage if the business is denied access to its premises by government action.

Similar lawsuits have been filed in Illinois, Indiana, Florida and Texas.  In some of those suits, the plaintiff has alleged that its policy did not contain a pandemic exclusion.  However, in others, the issue is the same as the lawsuit filed by the Washington, D.C. restaurant – that the reason for the closure was government action, not the virus.  It could be months, if not years, before these lawsuits are resolved.

So, what do these lawsuits tell the average business owner about insurance?

The lesson to be learned is that commercial insurance may provide less protection than you think.  There is a huge misconception about the business of insurance.  Most people buy an insurance policy expecting the carrier to bail them out when a crisis strikes.  However, insurance companies are not just in the business of paying claims.  Like any business venture, they are also in the business of making a profit.  And, the best way for an insurance company to make a profit is for premiums to exceed claims.  That is why an insurance policy, which may appear to provide broad coverage, may contain a boatload of exclusions.  It is also why a policy will generally require the insured to mitigate its damages and may also impose conditions on the insured’s ability to recover.  And, it is why the plaintiffs in these lawsuits were forced to sue their insurers.

What is a business owner to do?

One option is a captive insurance company.  A captive is an insurance company owned by the business that it insures.  A captive is formed primarily to cover the risks of that business, although it may also be required to insure unrelated risks.  Because the purpose of the captive is to provide real coverage to its related business, its policies can be tailored to the needs of the business in order to maximize the likelihood of coverage.  A captive can provide coverage that is either unavailable on the commercial market or prohibitively expensive.

In addition, it can cover gaps in a business’s existing commercial insurance.  For example, a captive may be more likely than a commercial insurance company to write a business interruption insurance policy that does not require physical damage to property or does not exclude business interruption caused by a pandemic.  A captive can provide greater protection to the business and greater comfort to the business owner.


If you do not already have a captive, it may be too late for you to obtain coverage for the COVID-19 pandemic under your existing insurance.  However, if this crisis has taught us anything, it is that another crisis is around the corner.  It may not be a health-related crisis.  But we can say with certainty that something is likely to interrupt your normal business operations in the future.  Now, is the time to prepare for the next crisis.  A captive can be a vital part of your risk management plan and help ease the pain caused by the next crisis.

If you are interested in learning more about captives and other risk management solutions, contact RMC Group.

Risk Management

Group Captive Case Study

How a group of like-minded business owners in the same industry saved money on business insurance with a group captive.

A group captive is a property and casualty insurance company owned by the members of a group.  It is often formed for a limited purpose and puts an emphasis on risk control and loss mitigation practices.


A hardening insurance market and increased competition drove members of a state concrete products association to look at alternative options for their rising property and casualty insurance costs; specifically General Liability, Workers Compensation, and Commercial Auto. 

Some members of the association banded together and formed a group captive insurance company to drive down costs, help control losses and provide greater control over claims experience.

Before forming the captive, the 31 members had obtained insurance on the commercial market, and each paid at least $253k in annual insurance premiums.  Collectively, they paid premiums just under $8M. The average rates for the group are listed below:



The members formed a group captive.  As part of the process, a selection committee was appointed to vet potential members of the group.  This ensured that only businesses that were committed to the i standards of the group were involved. 

The members of the group shared information and implemented safety procedures with the goal of minimizing losses and reducing premiums for the entire group.


The results so far have been positive, in the second year of operation, there was a premium increase in the group program. This increase paid by members was half of the increase seen by similar companies for the same coverage in the open marketplace. 

As the captive matures, the expectation is that premiums will continue to be less than comparable insurance purchased in the commercial market.

The members of the group maintain best practices and safety protocols that reduce loss frequency and loss ratios. This results in lower premiums for the members and greater profits for the captive. 

Risk Management

Captive Insurance Covid-19 Claims

We have received a number of calls asking whether the economic disruption caused by the Covid-19 pandemic can be covered by a captive insurance company and how a captive should respond to the crisis.

What is a coverage trigger?

Insurance is the transfer of risk from a person or company, called the insured, to an insurance company in exchange for the payment of a premium.

The risks covered and the conditions of coverage are documented in a written insurance policy.

The policy details the incidents, events, or circumstances that trigger coverage under the policy. The triggers of coverage under a policy depend on the type of policy and the language of the policy. The type of policy and the language of the policy are based on the underwriting/actuarial report obtained by the insured company.

What happens after coverage is triggered?

It is important to differentiate between triggers of coverage and conditions of coverage.

Conditions of coverage are the steps that an insured must take after a trigger of coverage occurs before the insurance company will accept liability under the policy.

Conditions of coverage include notifying the insurance company that a claim has occurred, with a detailed description of the claim, and submitting proof of loss.

What types of policies might cover COVID-19?

Some of the policies that may provide coverage for losses triggered by the Covid-19 pandemic are:

  • Business Interruption
  • Contingent Business Interruption
  • Supply Chain Interruption
  • Communicable Disease Liability
  • Regulatory Change
  • Political Risks

How do you determine if COVID-19 is covered?

Whether or not a policy provides coverage depends upon the language of the policy.

Each policy has a unique definition of Insured Occurrence and Insured Loss.  The definition of Insured Occurrence determines whether a certain event, such as the Covid-19 pandemic, is covered under the policy.  The definition of Insured Loss determines the types of economic loss covered under the policy.

The first question to ask is whether the economic disruption caused by the Covid-19 pandemic falls within the definition of Insured Occurrence contained in the policy.

If it does, the next question is whether the losses suffered by the insured fall within the definition of Insured Loss.  Only if the answer to both questions is yes will the policy provide coverage.

What are the steps if you think you have a claim?

If you desire to make a claim under a policy as a result of the Covid-19 pandemic, it is important for you to document any potential claim.

You need to identify the nature of the disruption to your business and when and why it occurred.  In addition, you need to document your losses.

We understand that losses may be incurred over a period of time.  However, it is important that you provide notice of a claim to your captive as soon as you are aware of the claim, even if you do not know the exact amount of loss.

Every claim submitted will be investigated and adjusted.  This process can be made much easier by gathering information, both loss specific and financial when an event occurs and providing it in a timely manner.



Risk Management

What a Business Owner May Discover After a Risk Review

Any business owner will know the stress of finding the right insurance policy to protect their business.

After all, it’s difficult to diagnose the risks a company faces and anticipate what could go wrong.

On top of that, insurance can be hard to understand. This only adds to the challenge of analyzing what could go wrong while trying to get the most bang for your buck.

[highlight style=”background-color: #fffec8; color: #000;”]The reality is that insurance policies are often renewed year after year without making sure that coverages are appropriately matched with a company’s ever-changing risks.[/highlight]

These risks might be anything from a change in company revenue to a change in the number of employees, or changes in third-party vendors and industry regulations.

Even if there haven’t been significant operational changes, the insurance market sees turnover, with new carriers regularly entering the market, possibly offering better coverage or lower pricing.

[highlight style=”background-color: #fffec8; color: #000;”]The 2018 Small Business Risk Report found that as many as 43% of small business owners had not reviewed their insurance policies and coverage within the past year.[/highlight] A lot can change within a year.

What Is a Risk Review?

A risk review is a thorough process performed by a risk manager to ensure that a business has met all of its insurance needs.

The risk review process is a detailed analysis of a business’s current insurance policies to determine 1) if the business has the right coverage, and 2) if the business faces unintentional gaps that will cause substantial exposure to risk now, or in the future.

[highlight style=”background-color: #fffec8; color: #000;”]This process helps business owners prioritize risks and identify cost-effective ways to manage that risk with traditional or alternative types of insurance products.[/highlight]

What’s Included in a Risk Review

Risk reviews include two major analytical categories: the commercial property and casualty (P&C) analysis, and the alternative opportunity analysis.

The commercial P&C analysis reviews current commercial property and casualty policies to accurately identify:

  • Gaps in coverage
  • Coverage exclusions
  • Additional necessary coverage
  • Opportunities to rearrange insurance packages for more comprehensive or lower-cost coverage
  • More efficient insurance methods

The alternative opportunity analysis then determines what risk management tools are available to improve coverage while offering ideas that a business owner may not even be aware of.

Such tools may include alternatives to traditional insurance, like, captive insurance or self-insured medical plans with stop-loss coverage.

[content_band bg_color=”#4cb6e9″ border=”all”] [container] [custom_headline style=”margin: 0; color: #fff;” type=”center” level=”h4″ looks_like=”h5″ accent=”true”]RMC provides complementary risk reviews to business owners and client’s of professional advisors. Request a free risk review here.[/custom_headline] [/container] [/content_band]

How the Risk Review Process Works

The risk review process begins with a deep dive into the business’s commercial insurance policies and health insurance plan, clearly outlining:

  • Deductibles
  • Endorsements
  • Limitations and exclusions
  • Property locations
  • Risk classifications

It will also look at a company’s online and marketing presence—individual websites, Facebook pages, Yelp reviews, and any other internet presence—to paint a complete picture of the business risks from a risk manager’s point of view.

Many times, businesses advertise products and services online that are not covered under the existing insurance arrangement.

Following the outline will be a section offering recommendations for any gaps or emerging risks that are identified under each policy.

The overall length of a risk review depends upon the number of policies that are reviewed and the density of detail needed to accurately offer recommendations.

These reports typically take 1 to 3 weeks to complete and can range in length from 5 to 30 or more pages.

Final Thoughts

A risk review will help a business owner learn about the tools available to manage risk.

These reviews are ideal for business owners who worry about whether they have the coverage they need, and for the best value.

Since no one can accurately anticipate everything that might go wrong in a business, [highlight style=”background-color: #fffec8; color: #000;”]a third-party risk review is a great way to find potential problem areas that the business’s current insurance agent may have overlooked.[/highlight]

At RMC, our dedicated professionals bring deep industry knowledge, extensive experience, and a careful, unbiased perspective to every risk review.

For over 45 years, we have remained well-equipped to help you get the insurance you need, including business insurance, captive insurance, health stop-loss, retirement plans, life, and personal insurance.

[highlight style=”background-color: #fffec8; color: #000;”]To discover if your business is adequately protected, get in touch with us today and request a free risk review.[/highlight]

While risks can never be fully eliminated, a risk review will give you peace of mind in knowing your business is properly covered in the event of a catastrophic loss.

Personal Insurance

Night Driving Dangers

A little extra caution can go a long way while driving at night

Summer has ended, and while fall and winter have their own pleasures — including cooler weather — longer nights mean increased danger on the roads.

You might think you drive just as well at night, but consider this: Even though nighttime driving accounts for just 23% of vehicle miles traveled, more than 50% of fatalities for vehicle occupants 16 and older occur between 6 p.m. and 6 a.m., according to the National Safety Commission (NSC).

Because we’re big advocates for safety at RMC Group, we thought it would be helpful to take a look at why night driving is more dangerous, and what you can do to decrease that danger.

What’s dangerous about night driving?

  1. Decreased vision – We won’t go into all the biological details, but different parts of the eye (such as iris, pupil, and retina) work differently at night. Your peripheral vision is actually slightly improved, but it’s more difficult to focus on objects ahead of you. And traveling between well-lit areas and darker roads creates issues as well.
  1. Driving too fast for your headlights – Depending on vehicle speed and headlight setting, many people “over-drive” their headlights. That means, by the time they see something on the road, it’s too late to stop in time to avoid it.
  2. Impaired judgment – Whether due to drowsiness or the use of alcohol or drugs, it appears that drivers at night often don’t use good judgment. According to the NSC, 66% of fatalities at night involve vehicle occupants who weren’t wearing seat belts.

So what do you do?

Sometimes, there’s no way around driving at night. So here are some tips to help you make a safe trip — whether you’re just running to the store, or you’re headed downtown for dinner on 5th Avenue.

  1. Make sure your vehicle’s lights are in good working condition. And not just headlights, but turn signals, taillights, etc.
  2. Avoid speeding. Leave a bigger cushion between you and other cars than you would during daylight hours. Leave yourself more time for the trip.
  3. Be more aware of your surroundings. You shouldn’t be using your phone, messing around with the radio or trying to find something on the floor while you’re on the road anyway — and distractions are even more deadly at night.

Of course, if you’re not comfortable driving at night, the best thing is to avoid it altogether if possible. There’s nothing wrong with asking for a ride from a trusted safe driver or waiting for the sun to come out!

Contact Us!

At RMC Group, we can work with you to make sure you’ve got the coverage you need, while at the same time using all possible credits and discounts to make that coverage affordable. Just give us a call at 239-298-8210 or send us a note at [email protected]. We want to help you meet your goals, and make sure what’s important to you is protected!

Reposted with permission from Safeco Insurance®



Risk Management

Help Your Manufacturing Clients Understand Trade Tariffs

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How do your manufacturing clients deal with tariffs and supply chain interruptions?

Manufacturing businesses today are at risk because of the unpredictable geopolitical environment we find ourselves in.

Even if your manufacturing clients don’t directly deal with these suppliers, their suppliers most likely do in this global economy.

  • So what happens when the new tariffs are imposed?
  • What happens when a government bans businesses from exporting or importing from another country?
  • How does this affect the bottom line?
  • Can a company survive the shock?
  • Are company margins high enough to absorb the increase cost?
  • Or do they have alternative suppliers to turn to in other areas of the world or even locally?

As a trusted advisor for your clients, you can shed light on the topics, and help build contingency plans to mitigate these sort of risks without having to become a manufacturing trade expert.

There are potential insurance options available for businesses that find themselves in these situations and most businesses and advisors for that matter, don’t even know they exist.

Manufacturing is what made this country great by providing good paying jobs, so helping companies deal with these new dilemmas is of great importance to maintain and grow manufacturing in this country.

As trade risk increases day by day, be the trusted advisor on the forefront of a solution by showing your clients that you’re staying ahead of the curve making you invaluable to their team.

To find out what options may be available for you and your clients.

Contact me today or drop me a message below.

We’re here to help!