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Member, Beacon International Group, Ltd.
WASHINGTON—The Labor Department has proposed allowing Verizon Communications Inc. to use its Vermont captive insurance company to reinsure group term life insurance benefits.
Under the arrangement, Exchange Indemnity Co. would reinsure 100% of the risk with Prudential Life Insurance Co., which underwrites life insurance plans covering Verizon employees and subsidiary Verizon Wireless.
In its most recent fiscal year ending Sept. 30, 2010, EIC, which was licensed in 1995, reported $918 million in gross annual premiums and $1.7 billion in assets.
Basking Ridge, N.J.-based Verizon filed for approval of its proposal under a 1979 Department of Labor rule—known as a class exemption—in which captives can be used to fund benefit risks of their parent companies as long as 50% of the captive's premiums come from third parties.
The proposed exemption was published in Thursday's Federal Register.