Hartford-based United Technologies wants to use its 12-year-old Vermont captive insurance company, United Technologies Insurance (Vermont) Inc., to reinsure group term life insurance, accidental death and dismemberment and long-term disability policies.
The group life and accidental death and dismemberment policies would be written by a Cigna Corp. unit, while the long-term disability policies would be written by a unit of Liberty Mutual Group. The fronting insurers would reinsure 100 percent of the risk with UTIV.
United Technologies now uses UTIV to fund property/casualty risks. Last year, UTIV generated about $50 million in premiums, making it one of Vermont’s larger single-parent captives.
United Technologies, which had $47.8 billion in revenue last year, is the first employer this year to ask for Labor Department approval to fund employee benefits through a captive insurance company. Earlier this year, financial services giant Wells Fargo & Co. of San Francisco received approval to reinsure group and long-term disability policies through its Vermont captive.
Employers that received approval last year to fund benefits risks through their captive insurance companies were consumer food products manufacturer H.J. Heinz Co. of Pittsburgh, which is using its Vermont captive insurance company to fund group term life insurance policies; U.S. affiliates of U.K. pharmaceutical manufacturer AstraZeneca PLC to fund benefits through its Vermont captive; and Atlanta-based natural gas distributor AGL Resources Inc. to reinsure certain benefit risks through the Hawaii branch of its British Virgin Islands captive insurance company.