Utility temporarily withdraws captive benefit funding planPosted On: Nov. 23, 2015 12:00 AM CST
A St. Louis-based utility company has temporarily withdrawn its application with the U.S. Labor Department for permission to use its South Carolina captive insurer to fund life insurance and long-term disability risks.
Under Laclede Gas Co.'s proposal, the life insurance would be written by Minnesota Life Insurance Co., while the long-term risks would be written by Prudential Insurance Co. of America.
Those risks would be reinsured by Laclede's 3-year-old captive, Laclede Insurance Risk Services Inc., which already funds medical stop-loss risks and reported $1.2 million last year in gross written premiums.
But in a move described as temporary, the utility last week withdrew its application.
“Laclede Gas withdrew its application in order to allow more time for review. We intend to respond to questions raised by the” Department of Labor and soon resubmit the application, said Ted Scallet, a principal with Groom Law Group in Washington, who filed the application.
That application, Mr. Scallet added, would, like the earlier one, utilize a rapid regulatory review process known as ExPro.
Prior to Laclede's application, three employers received Labor Department approval this year to fund benefits risks through their captives.
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 the year, 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 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 cutting costs compared with buying coverage in the commercial market, as well as broadening a captive's book of business, captive experts say.