Labor Department backs freight carrier's plan to fund benefits through captive insurer

WASHINGTON—The Labor Department has proposed allowing freight carrier R+L Carriers Shared Services L.L.C. to fund its employee benefit risks through a captive insurer.

Under the proposal, published in Monday’s Federal Register, Wilmington, Ohio-based R+L would use Royal Assurance Inc., a captive licensed in Arizona, to reinsure accidental death and dismemberment benefits, life, and long-term and short-term disability risks that are insured by a unit of Unum Group.

Captive owned by founding family

Royal Assurance is owned by members of the family that founded the freight carrier, which has about 9,000 employees.

R+L’s application was filed by George O’Donnell, senior vp with Aon Hewitt Inc. in Somerset, N.J.

This year, the Labor Department gave final authorization to New York-based Deutsche Bank Americas Holding Corp. to use its Vermont captive to reinsure long-term disability benefits, as well as approving Basking Ridge, N.J.-based Verizon Communications Inc.’s application to fund LTD risks through its Vermont captive insurer.