Gas utility company gets tentative OK to fund benefits through captiveReprints
Laclede Gas Co. on Thursday received tentative authorization from the U.S. Department of Labor to use its South Carolina captive insurer to fund life insurance and long-term disability risks.
Under the proposal by the St. Louis-based utility company, the life insurance would be underwritten by Minnesota Life Insurance Co., while the long-term disability coverage would be written by Prudential Insurance Co. of America.
Those risks would be reinsured by Laclede's captive, Laclede Insurance Risk Services Inc., which already funds medical stop-loss risks and reported $1.2 million in 2014 in gross written premiums.
Final Labor Department approval of the application, which was filed by Ted Scallet, a principal with Groom Law Group in Washington, is expected later next month.
Last year, Labor Department regulators approved three captive benefits funding applications.
In June, Hormel Foods Corp. received final Labor Department authorization to fund life and accidental death and dismemberment benefits through its Vermont captive insurer.
Earlier in 2015, regulators approved captive benefit funding plans filed by Healthcare Services Group Inc., a Bensalem, Pennsylvania-based provider of management and other services to health care companies, to fund voluntary medical, life and short-term disability benefits through its New Jersey-based captive.
Regulators also gave final approval last year to an application filed by Sealed Air Corp., a Charlotte, North Carolina-based packing materials manufacturer, to fund life and accidental death and dismemberment benefits through its Vermont-based captive.
The captive benefits funding approach is appealing to employers for several reasons, including lower costs compared with buying coverage in the commercial market, as well as broadening a captive's book of business, captive experts say.