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Sealed Air Corp. has received tentative authorization from the U.S. Labor Department to fund several benefit risks through its Vermont captive insurance company.
The Charlotte, North Carolina-based packaging materials manufacturer wants to use Saddle Brook Insurance Co. to reinsure life and accidental death and dismemberment policies issued by Zurich American Life Insurance Co.
Saddle Brook was licensed by Vermont regulators in 2003 and is currently used by Sealed Air to fund a variety of casualty risks.
Sealed Air's application was reviewed under a regulatory process known as ExPro. Under ExPro, the Labor Department must act within 45 days of a company request for an arrangement that would normally be barred by the Employee Retirement Income Security Act.
To qualify for ExPro, an applicant has to cite two substantially similar individual exemptions approved in the past 10 years, or one similar exemption and one approved through ExPro within the past five years.
In its application, Sealed Air cited an individual exemption The Coca-Cola Co. received in 2013 to fund group term insurance and accidental death and dismemberment benefits through its South Carolina captive, and an exemption Intel Corp. received last year to reinsure life and accidental death and dismemberment benefits through its Hawaii captive.
Currently, another big employer, meat packing company Hormel Foods Corp. of Austin, Minnesota, is waiting for regulatory action — also through the ExPro process — on its proposal to fund life and long-term disability benefits through its Vermont captive.
In 2012, the Labor Department suspended ExPro for captive benefits funding arrangements while reviewing the criteria for the process. The review was completed in late 2013, which reopened the ExPro process.
Sealed Air's application was filed by Spring Consulting Group L.L.C. in Boston, while Hormel's was filed by Aon Risk Solutions in Somerset, New Jersey.
Thursday marks the 35th anniversary of a U.S. Department of Labor ruling that opened the door for employers to use their captive insurance companies to fund employee benefit risks.