At Asterix Global Services, Inc., our unwavering dedication lies in assisting insurers, administrators, agents, and marketers of service contracts, warranties, and various insurance-related product in navigating the intricate realms of corporate compliance, governance, accounting, tax, and risk management uniquely tailored to producer owned reinsurance companies.
With a collective wealth of experience, our team of experts delivers comprehensive solutions to assure that your organization operates in compliance with the law and is taxed efficiently.
Partner with us to confidently steer through the complexities of the insurance landscape.
Strategic Goal Setting: Developing a clear understanding of the client's goals and align it with a cohesive strategy and actions to drive long-term success.
Program Evaluations: Conduct evaluations of existing and new programs, or structures, and review terms and agreements for effectiveness related to client's growth.
Domicile Evaluation: Considering factors that may influence the choice of business location for optimal business operations.
Tax Considerations: Evaluate tax implications of existing and new programs, or structures, to maximize tax efficiency for the client and provide insights into tax considerations which must be taken into account.
Key Performance Indicators Analysis: Analyze key performance indicators for accurate business assessment leveraging client's current data to improve profitability.
- Make recommendations for strategic adjustments when necessary
- Account for and adapt to the business landscape.
Compliance Reviews: Review and ensure compliance with relevant laws and regulations within selected domicile and the United States to mitigate legal risks and ensure adherence to standards and regulations.
Accurate Financial Record Keeping: Maintain a clear and organized financial record with meticulous bookkeeping for better decision-making.
Compliance Assurance: Ensure compliance with accounting standards and regulations minimizing the risk of penalties and legal issues related to financial reporting.
GAAP and IFRS Compliance: Provide confidence in the accuracy and reliability of financial reporting adhering to Statutory Accounting Principles (SAP) and/or Generally Accepted Accounting Principles (GAAP).
Financial Statement Accuracy & Precision: Prepare detailed balance sheets that reflect the true financial position of the business and accurate income statements detailing revenue, expenses, and profit. Enabling businesses to assess profitability and financial performance.
Accurate & Comprehensive Tax Documentation & Filing: Ensure accurate and timely filing of business tax returns minimizing the risk of errors and penalties. Gather and organize all necessary financial documents for thorough tax preparation streamlining the tax filing process for clients.
Tax Compliance Assurance: Ensure compliance with current tax laws and regulations staying updated on changes in tax code to identify and maximize eligible deductions to minimize tax liabilities.
Entity Structure Optimization: Evaluate and recommend the most tax-efficient business entity structure to optimize both short-term and long-term tax advantages.
Expert Guidance: Provides a streamlined process for compliant company formation.
Entity Structure Advice: Evaluate and provide strategic advice on the most suitable business structure to provide maximum profitability and tax efficiency.
Corporate Governance: Specialize in producing accurate and comprehensive corporate records providing a reliable foundation for transparent governance and regulatory compliance.
Regulatory Reporting and Filings: Prepare and file initial and annual documents necessary for corporate registration and licensing issuance and maintain ongoing compliance.
Regulatory Compliance Management: Monitor changes in regulations and ensure ongoing compliance with relevant laws.
Document Retention and Management: Establish and manage document retention to ensure easy retrieval of critical documents.
Annual Report Filings: Preparation and timely filing of annual reports to avoid penalties and maintain good standing with regulatory authorities.
Tailored Strategic Planning: Design strategic plans customized to the unique needs and goals of each client ensuring alignment with industry trends and market dynamics.
Training Programs: Create customized training program to enhance the knowledge of industry professionals addressing specific skill gaps and foster a culture of continuous learning.
Risk Assessments: Conduct thorough risk assessments to identify potential threats to the business.
Strategic Risk Transfer: Assist in strategic risk transfer through contractual agreements and insurance mechanisms.
Strategic Program Design: Develop customized programs, aligned with your organization's goals and objectives, to meet the unique needs of your target audience.
Customized Agreement Drafting: Draft customized agreements tailored to your specific needs to ensure clarity and precision in contractual language.
Contract Review and Amendments: Conduct comprehensive reviews of agreements and propose amendments as needed.
Marketing & Marketing Material Development: Develop compelling and persuasive content for various marketing materials that resonates with the target audience.
Industry-Specific Valuations: Preform company valuations tailored to the F&I Industry with consideration of future projections and industry trends in the valuation process.
Risk Mitigation Strategies: Analyze the impact and likelihood of risks affecting the business and conduct thorough risk assessments to identify potential threats.
Why Choose Us
Experience: Leveraging years of profound experience, our team possesses an in-depth understanding of accounting and financial reporting standards.
Accuracy: Our unwavering commitment is to provide financial statements that are accurate, ensuring reliability and trust in every detail.
Regulatory Adherence: Our services strictly adhere to all pertinent accounting regulations and standards, ensuring your business operates in full compliance with the regulatory landscape.
Client-Centric Excellence: Our approach centers around open communication, collaborative partnerships with clients, and consistently exceeding expectations with impactful results.
Expertise: Benefit from our team's extensive knowledge and hands-on experience in corporate compliance and governance, ensuring a depth of expertise to meet your business needs.
Tailored Solutions: Recognizing the distinctiveness of each organization, we craft bespoke services meticulously aligned with your specific requirements.
Comprehensive Legal Compliance: Safeguard your business by ensuring strict adherence to all pertinent laws, regulations, and industry standards through our diligent and thorough compliance services.
Commitment to Transparency: Upholding transparency as a cornerstone, we strive to foster trust in every interaction with our clients.
Asterix Global Services, Inc. provides consultation and management for the following structures.
Backend Structures:
Forming a Producer Affiliated Reinsurance Company to accept the net written premiums and risk associated with products underwritten by an insurance carrier. Program allows for full participation in underwriting results and investment income. The profits generated by these companies can provide certain economic, business, and tax advantages to individuals selling or marketing service contracts to consumers.
Economic Advantages:
- Underwriting and Investment Income: Full participation in company profits.
- Tax Advantages: Provides favorable tax treatment, determined based on the Net Written Premiums or Direct Written Premiums written annually, due to the allowance for the deduction of a portion of premiums earned.
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- 831(a) Company - Non-Life Insurance Companies
- As a company licensed, authorized, or doing the business of insurance the Internal Revenue Code provides qualifying company to be taxed as an insurance company under Section 831(a) of the Internal Revenue Code.
- 831(b) Company - Small Non-Life Insurance Companies
- Provides non-life insurance companies writing less than $2.8 Million (2024 Premium Threshold) in Net Written Premiums or Direct Written Premiums annually the ability to exclude underwriting gains/losses from its taxable income.
- The company making such an election must pass a diversification test to qualify as an "831(b) Company."
- 831(a) Company - Non-Life Insurance Companies
- Asset Accumulation: Accumulate reserves reducing exposure to unforeseen liabilities.
- Utilization of Profits: Profits generated can be utilized as a financing source or distributed as dividends to shareholders, currently treated as qualified dividends (capital gains treatment).
Structuring and maintaining a Producer Affiliated Reinsurance Company requires professional advice from tax, legal, and insurance experts due to its complexity and potential regulatory scrutiny.
Forming a Producer Owned Administration Company provides larger dealers, dealer groups, or product marketers the ability to align their automotive retail sector with their customer's needs. Program allows for full participation in underwriting results and investment income. Much like a PARC these companies can provide certain economic, business, and tax advantages to their shareholders.
Economic Advantages:
- Underwriting and Investment Income: Full participation in company profits.
- Tax Advantages: Provides favorable tax treatment, determined based on the Net Written Premiums or Direct Written Premiums written annually, due to the allowance for the deduction of a portion of premiums earned.
-
- 831(a) Company - Non-Life Insurance Companies
- As a company licensed, authorized, or doing the business of insurance the Internal Revenue Code provides qualifying company to be taxed as an insurance company under Section 831(a) of the Internal Revenue Code.
- 831(b) Company - Small Non-Life Insurance Companies
- Provides non-life insurance companies writing less than $2.8 Million (2024 Premium Threshold) in Net Written Premiums or Direct Written Premiums annually the ability to exclude underwriting gains/losses from its taxable income.
- The company making such an election must pass a diversification test to qualify as an "831(b) Company."
- 831(a) Company - Non-Life Insurance Companies
- Accounting Method: Utilizing retail cost accounting additional tax deferrals may be generated for a portion of time allowing for the accumulation of funds to provide financial stability.
- Cost Savings: Reduction in insurance coverage and potentially administrative services may reduce overall operational costs and provide for higher returns and access to capital through reducing investment guidelines.
- Asset Accumulation: Accumulation of reserves reduces exposure to unforeseen liabilities.
- Utilization of Profits: Profits generated can be utilized as a financing source or distributed as dividends to shareholders, currently treated as qualified dividends (capital gains treatment).
Business Advantages:
- Customized Service Packages: Offers customizable products to meet the unique requirements of individual dealerships, ranging from ancillary products to service contracts.
- Enhanced Customer Experience: Aims to improve the overall customer experience by providing seamless and efficient administrative support for warranty claims, repairs, and other service-related processes.
- Compliance: The structure must comply with state regulatory bodies and tax authorities.
- Brand Consistency: Ensures consistency in the delivery of service contract services across the dealership network, contributing to a unified brand image.
- Data Analytics: Utilizes data analytics to provide insights into warranty performance, customer trends, and other relevant metrics, empowering dealerships to make informed business decisions.
Structuring and maintaining a Producer Owned Administration Company requires professional advice from tax, legal, and insurance experts due to its complexity and potential regulatory scrutiny. We stay abreast of industry regulations and compliance requirements, helping dealerships navigate complex regulatory landscapes.
Forming a Foreign Captive or Direct Write Insurance Company provides mid to larger companies the ability to operate as, and issue insurance policies directly to a parent, subsidiary, or outside companies providing the ability for a company to lower the cost of risk, stabilize costs of insurance, customize coverage and issue coverage unavailable in the market. These companies can also provide certain economic, business, and tax advantages to their shareholders.
Economic Advantages:
- Cost Efficiency: Eliminating the commission structure associated with intermediaries and benefiting from shared administrative services.
- Underwriting and Investment Income: Full participation in company profits.
- Tax Advantages: Provides favorable tax treatment, determined based on the Net Written Premiums or Direct Written Premiums written annually, due to the allowance for the deduction of a portion of premiums earned.
-
- 831(a) Company - Non-Life Insurance Companies
- As a company licensed, authorized, or doing the business of insurance the Internal Revenue Code provides qualifying company to be taxed as an insurance company under Section 831(a) of the Internal Revenue Code.
- 831(b) Company - Small Non-Life Insurance Companies
- Provides non-life insurance companies writing less then $2.8 Million (2024 Premium Threshold) in Net Written Premiums or Direct Written Premiums annually the ability to exclude underwriting gains/losses from its taxable income.
- Company making such an election must pass a diversification test to qualify as an "831(b) Company”
- 831(a) Company - Non-Life Insurance Companies
- Asset Accumulation: Accumulate reserves reducing exposure to unforeseen liabilities.
- Utilization of Profits: Profits generated can be utilized as a financing source or distributed as dividends to shareholders, currently treated as qualified dividends (capital gains treatment).
Business Advantages:
- Access to Different Markets: Allows businesses to access insurance coverage tailored to specific risks providing a more comprehensive approach to risk management.
- Regulatory Flexibility: May benefit from regulatory frameworks in certain jurisdictions that are more favorable or flexible compared to domestic regulations.
- Strategic Alliances: Can form strategic alliances to enhance the insurer's ability to navigate markets.
- Streamlined Communication: Direct communication between the insured and the insurer facilitates faster and more efficient information exchange, reducing delays in policy management.
- Customized Policies: Can offer more personalized and customizable products and policies, tailoring coverage to individual needs and the challenges of its clients.
- Faster Claims Processing: With a direct channel, the claims process is typically quicker, leading to faster resolution and payment in the event of a loss.
- Transparency: Policyholders have clearer visibility into policy terms, premiums, and coverage details when dealing directly with the insurance company.
- Flexibility in Coverage: May provide more flexibility for clients to adjust coverage levels and terms based on changing needs and circumstances.
- Simplified Underwriting: May simplify the underwriting process, making it more straightforward for policyholders to obtain coverage.
- Risk Management:
- Risk Mitigation: Addressing risks that might not be adequately covered by traditional insurance or that could result in substantial financial loss associated with changes in economic conditions, regulatory landscapes, and political events.
- Diverse Risk Exposure: Provides opportunities for diversification of risk by operating in multiple markets, reducing dependence on the conditions of a single market.
- Brand Consistency: Ensures consistency in the delivery of service contract services across the dealership network, contributing to a unified brand image.
Structuring and maintaining a Captive or Direct Write Insurance Company requires professional advice from tax, legal, compliance and insurance experts due to its complexity and potential regulatory scrutiny. We stay abreast of industry regulations and compliance requirements, helping dealerships navigate complex regulatory landscapes.
Retrospective programs are performance-based programs where the profits are determined retrospectively based on the actual loss experience of the producer.
Economic Advantages:
- No Risk Sharing: Producer does not share in the risk of the insurer however the program promotes an atmosphere in which producer is vested in minimizing losses and maintaining a favorable claims experience to achieve profitability.
- Underwriting and Investment Income: Partial to full participation in underwriting profits usually tied to the production of the producer and profitability is contingent on actual loss outcomes.
- Risk Control and Loss Prevention: Encourages producers to implement effective risk control and loss prevention measures to minimize claims and ultimately achieve higher returns.
- Cash Flow Benefits: Distributions of profits provide cash flow benefits for the producer during the policy period.
- Tailored to Specific Risks: Well-suited for clients with fluctuating and unpredictable loss exposures. Suitable for where the full extent of claims may not be immediately apparent, such as GAP contracts.
- Reporting Transparency: Additional reporting offers transparency to insured parties regarding the factors influencing their premiums, fostering a collaborative approach between the insured and the insurer.
A non-controlled foreign corporation (NCFC) is a foreign company in which the ownership interest by U.S. shareholders falls below the threshold needed for it to be classified as a controlled foreign corporation (CFC). While NCFCs may provide certain advantages, navigating the complex regulatory environment and staying compliant with U.S. tax laws remains crucial for U.S. shareholders with investments in such entities. While NCFCs may provide certain advantages, navigating the complex regulatory environment and staying compliant with U.S. tax laws is crucial for U.S. shareholders with investments in such entities.
Economic Points:
- Investment Returns: Typically produces higher investment returns due to the pooling of assets.
- Segregation of Funds: Funds are segregated for the benefit of each series of stock.
- Tax Cuts and Jobs Act of 2017: The Act changed the exemption of the NCFC structures, and a company must now qualify as an Active Insurance Company for shareholders to not be subject to Passive Foreign Investment Income Tax.
- To qualify as an Active Insurance Company the company’s Applicable Insurance Liabilities less Unearned Premium Reserves must equal more than 25% of total assets of the company.
- Passive Income and Subpart F Rules: The classification as a Non-Controlled Foreign Corporation may impact the application of Subpart F rules, especially concerning passive income. Subpart F rules are essentially an anti-deferral provision, ensuring that U.S. taxpayers do not indefinitely defer U.S. taxation on certain types of foreign income by routing it through controlled foreign entities. NCFCs are generally not subject to the Subpart F rules currently. If the IRS deems the income to be Subpart F income, it may be subject to current U.S. taxation, regardless of whether the income is distributed to the U.S. parent.
- Tax Reporting Requirements: While NCFCs may have fewer tax consequences, U.S. shareholders are still required to report their interests in these foreign corporations, ensuring compliance with U.S. tax regulations.
- Tax Deferral Strategies: Businesses may use NCFCs as part of tax deferral strategies, managing when they recognize income for tax purposes. NCFCs are not automatically subject to the same anti-deferral provisions and rules.
- Qualified Dividends: Dividends received by U.S. shareholders from the NCFC may qualify for preferential tax treatment if they meet the criteria for qualified dividends. Qualified dividends are generally taxed at lower capital gains tax rates. All distributions however must be approved by the Board of Directors.
Business Points:
- Foreign Corporate Entity: An entity incorporated outside the U.S. where the controlling interest is held. Characterized by the fact that the majority ownership or control does not reside with individuals or entities within the country where the corporation is organized. NCFCs offer U.S. investors greater flexibility in managing their foreign investments without triggering certain U.S. tax consequences associated with CFC status.
- Limited Control: Shareholders in NCFCs typically have limited control or influence over the corporation's operations, reducing the risk of being deemed in control and subject to CFC regulations.
- Reduced Reporting Requirements: NCFCs may have reduced reporting requirements compared to Controlled Foreign Corporations, simplifying certain regulatory obligations.
A Non-Controlled Foreign Corporation requires professional advice from tax, legal, compliance and insurance experts due to its complexity and potential regulatory scrutiny. Asterix can help clients assess if a Non-Controlled Foreign Corporation structured program is right for them.