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Transfer / Fund FAS 106 A Unique Risk Transfer Product
FAS 106 Liability Risk Transfer/Funding A unique product to transfer/fund an employer's FAS 106 liability for post retirement healthcare benefits for a fixed, generally tax-deductible, premium. The ideal candidates for this product have the following characteristics: - A closed beneficiary population consisting of between 250 and 1500 retirees and dependents. Larger groups will be considered.
- Lifetime Maximum Benefit remaining for any individual at plan inception is below $100,000. Few pre-age 65 retirees in population. (Higher individual lifetime limits are possible using modified product structures.)
- Existing captive insurer available to act as primary carrier, a willingness to create a captive entity or rent a captive entity.
Potential Benefits Buyer or ongoing entity is insulated from the risks in funding future retiree healthcare benefits including: - Interest rate risk
- Mortality-Morbidity rate variation from funding assumption
- Medical cost inflation risk
The product serves to insulate the beneficiary retirees from the risks associated with relying on the long-term profitability of a past employer. Generally, premiums are tax-deductible.
Information Requests Data needed to quote insurance coverage for FAS 106 liability. - Details on the corporation and its business, your motivation to enter into the transaction
- A full copy of the latest actuarial reserve valuation report with respect to the liabilities
- Authorization for reinsurers to contact the actuarial firm to obtain further details
- Details of (early) retirement plans, including any negotiated arrangements, for example with unions
- Details on administrative arrangements, both current and future
- Census details (in electronic spreadsheet format) on the closed block of covered persons (retirees and covered family members) including:
- Date of retirement
- Early retirement indicator
- Professional category (e.g. management, administrative, blue collar)
- Union indicator
- Plan coverage indicator(s)
Contact Information
Brad Hill, President, NSC
2 East Erie Street
Suite 2709
Chicago, IL 60611
Tel: 312-642-4520
Fax: 312-642-4519
Email: bradhill@nationalseniors.com
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We can provide quality retiree insurance programs that can save you money and still provide options in both structuring and obtaining health care.
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