WASHINGTON—Two big employers have received final Labor Department approval to fund employee benefit risks through their captive insurance companies.

The Labor Department approved United Technologies Corp.'s application to use its Vermont-domiciled captive, United Technologies Insurance (Vermont) Inc., to reinsure group term life insurance, accidental death and dismemberment, and long-term disability policies. The group life and AD&D policies will be written by a CIGNA Corp. unit, while the LTD policies will be written by a unit of Liberty Mutual Group Inc.

The fronting insurers will reinsure 100% of the risk with UTIV. Hartford, Conn.-based jet engine manufacturer United Technologies, which last year reported $54.8 billion in revenues, now uses UTIV to fund a wide range of property/casualty risks.

The Labor Department also gave final approval for the U.S. affiliates of German delivery giant Deutsche Post AG, including DHL Express, to fund employee benefit risks through the Vermont branch of a Bermuda captive owned by a Deutsche Post affiliate.

Under the arrangement, the Vermont branch will reinsure long-term disability polices issued by Prudential Insurance Co. of America.

Deutsche Post, which in 2007 had worldwide revenues of about $99 billion, currently uses a captive in Luxembourg and its Bermuda captive to fund various benefit risks of employees outside the United States.