Two big employers are seeking Labor Department approval to fund employee benefit risks through captive insurance companies.
Midland, Michigan-based Dow Corning Corp., a joint venture of Dow Chemical Corp. and Corning Inc. and a manufacturer and supplier of silicone-based chemicals, wants to use its Devonshire Underwriters Ltd. captive to fund life and long-term disability benefits.
Dow Corning uses Devonshire to fund a variety of risks, including workers’ compensation, automobile liability and general liability risks.
As part of the arrangement, Minnesota Life Insurance Co. would issue the life insurance policies and reinsure the risk with Devonshire, which Dow Corning in June brought back to the United States to Washington from Bermuda, while Aetna Life Insurance Co. would reinsure long-term disability risks with Devonshire.
The application of Dow Corning, which reported 2008 revenue of $5.45 billion, was filed by Spring Consulting Group in Boston.
The other proposal involves R+L Carriers Shared Services, a privately held Wilmington, Ohio-based freight carrier, which has about 9,000 employees and a transportation fleet of nearly 13,000 tractors and trailers.
Under its proposal, R+L would use Royal Assurance Inc., a captive licensed last year in Arizona, to reinsure life, LTD and short-term disability risks insured by a Unum Group unit. Royal Assurance is owned by individuals who are members of the family that founded R+L and trusts established by those individuals.
R+L’s application was filed by the Somerset, New Jersey, office of Aon Consulting.