Infinity Dealer Services, Inc.
Reinsurance

Reinsurance and Other Participation Options

Retail Dealers who are involved in the sale of Finance and Insurance (F&I) products are in an enviable position. F&I products not only supply a significant source of high-margin income to their operations, but there are also several options that a Dealer has in structuring their receipt of this income, for managing their personal and business goals.

Commission Only Participation

The simplest way for a Dealer to participate in the income generated by the sale of F&I products is on a commission-only basis. The Dealer simply negotiates a commission from the Insurance Carrier and walks away from everything else; leaving the Insurance Carrier to take the risk, earn the underwriting profits, etc. This is simple for the Dealer, fixes its current margins and eliminates any projections of contingent income streams. Many times a Dealer just entering the Credit Insurance business will initially choose this option because of its simplicity and ease of administration.

Reinsurance Company Ownership

Reinsurance ownership provides attractions beyond what can be attained through a non-participation program; it has the potential to create substantial wealth. There are several possible routes of entry into Reinsurance:

• Set up an independent Reinsurance company for the Dealer
• Have the Dealer join a Reinsurance company owned by a group of Producers
• Create a Reinsurance company controlled by your Insurance Agent
• Contract with an independent, turnkey Reinsurance provider

Reinsurance arrangements through the Allstate Credit Division typically are set up whereby a Dealer or group of Dealers forms its own company, usually in the Turks and Caicos Islands or other offshore jurisdiction, and qualifies this company to accept Reinsurance business from a U.S. Insurer.

Consulting on the Benefits

When working with Producers who want to participate in a Reinsurance arrangement, you will want to discuss with them the costs and benefits of participation, the steps to entry, and their exit strategy. A Reinsurance arrangement has the ability to transform the nature of the Agent's relationship with the Dealer. Instead of being a product supplier, an Agent can elevate his position to a Financial Consultant and help the Dealer create a long-term wealth position with significant economic advantages.