Profit participation programs
Build for the future with our profit participation programs
Zurich wants to help you grow your dealership’s revenue potential through our profit participation programs. Profit participation is a critical part of how dealers can generate incremental income from F&I. You can put our F&I products to work building wealth.
Profit participation reviews from Zurich’s National Reinsurance Executives and Regional Finance Executives help identify trends and opportunities to manage and maximize a profitable portfolio. Participate in the profits of the Zurich F&I products you sell.
Types of profit participation plans offered:
- Reinsurance
- Producer Owned Reinsurance Company (PORC), aka Controlled Foreign Corporation (CFC)
- Non-Controlled Foreign Corporation (NCFC)
- Dealer Owned Warranty Company
- Contingent Commission (Retro)
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Highlights of Each Plan
- Most common structure in the marketplace
- Dealer owns it – no pooling with other dealerships’ F&I business
- Formed as a “c” Corp – dealer chooses company name, directors, officers and shareholders
- Ownership structure flexibility
- Most common domicile is the Turks and Caicos Islands
- IRC Section 953(d) election – treated as a domestic insurance company under the IRC
- US tax return and annual statement are completed each year
- Assets/cash are normally held in trust at a US bank (money never leaves the US)
- Dealer/owner flexibility:dividends, loans, surplus investments
- Domiciled in an offshore country
- Ownership is represented by purchasing preferred, non-voting stock
- No annual premium thresholds
- Company decisions are made by the Board of Directors, hence, no control by the shareholders
- Tax returns and annual statements are not reported to the IRS
- Not subject to federal income tax, but pays a federal excise tax of 1% of net written premium
- Shareholder
- Passive Foreign Investment Company (PFIC) exemption*
- Dealer forms a new corporation (C Corp) in the state of the producing dealership(s)
- Dealer Owned Warranty Company is the obligor, but not a licensed insurance company
- Dealer Owned Warranty Company registers as a service contract provider in the states it will do business in
- Program is administered by a third party, in this case Zurich
- A failure-to-perform contractual liability policy (CLP) is included in the program
- Minimum capital may be higher than PORC or NCFC structures ($50,000 - $500,000)
- Trust account requirement is at the discretion of the administrator/CLP provide
- No upfront money to participate
- Minimal investment income paid
- No downside risks
- No dealer control or decision making
- Retro payments are normally paid to the dealership
Discover more Zurich products and services tailored specifically for dealerships:
Automotive Resource Hub
Check out our collection of articles, webinars, podcasts and much more to assist you with your business. These resources can help you navigate and improve within the ever-changing and evolving automotive industry.