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Welcome to Hartwell Captive Insurance Company.

We are a Protected Cell Captive Insurance Company (PCCIC) created on January 13th 2016, under the Captive Insurance Legislation in the State of Tennessee.

Hartwell has been assigned a Financial Stability Rating® of “A Exceptional” by the credit rating agency Demotech, Inc (www.demotech.com). you can view our rating by clicking on this link : http://www.demotech.com/FSRBenefits

Hartwell is owned 100% by Roland Horton and William Harris. Both William and Roland have worked their entire careers in the insurance and reinsurance industry totaling 60 years of accumulated insurance knowledge and experience between them.

It is this accumulated Insurance Industry knowledge that make Hartwell Captive Insurance different.

The Hartwell Proposition

Hartwell offers corporate clients innovative Captive Insurance solutions to Insurance problems using the tools available to us as a PCCIC. We believe that we can offer our corporate clients unique insurance solutions to otherwise almost insurmountable problems.

We offer the Client the following:

  • Insurance Solutions for difficult to place insurances
  • Stability in cost of insurance and long-term continuity of business
  • Enable clients to participate in the Profits of their own Insurances and build a Fund over time
  • Hartwell will handle all associated Administration surrounding a Hartwell Policy/Captive Cell
  • The Hartwell structure can cover Insurance Perils/Risks which other Insurers would exclude
  • Hartwell can offer Clients options at Renewal above and beyond normal Insurer’s terms
  • Claims handled by a TPA that is either the choice of the Broker or the Client

Hartwell can offer all these services and options because of one overriding reason:

The interests of the Client and of Hartwell are aligned.

What is a PCCIC?

A PCCIC is an insurance company that can set up any number of segregated captive cells off the “core” of the PCCIC.

Each segregated cell captive is in effect a mini insurance company created to underwrite the client’s specific business needs.

Each cell is segregated from all the other cells, if one cell was to fail (and we’ve not had that happen) then it cannot affect the other cell captives.

Think of Hartwell as being the axle on a bicycle wheel and the cells are the spokes coming from the axle. Hartwell is the hub that ties everything together but each spoke is independent.

The license, regulation and statutory capital all rests with the “core” cell, Hartwell Insurance Company,we are the licensed entity that makes it all happen but every cell is independent and entirely segregated.

Hartwell, as the PCCIC, issues the Insurance Policy for and on behalf of the Segregated Cell. All Premiums under the Policy pass into the Cell and are accrued on behalf of the client. In the event that the client wishes to close the cell then all accrued Premiums (less claims and commissions) are returned to the client.

What is a Cell Captive?

Cells can be set up as Incorporated or Unincorporated cells.

An Incorporated cells is a company in its own right with separate legal identity and its own memorandum and articles of incorporation. It has its own board of directors and has an annual board meeting.

Unincorporated Cells are formed by contract (rather than by incorporation) and are therefore quicker to form. They are regulated by captive insurance laws and their corporate governance is via contractual rights only.

We tend to use the unincorporated cell structure as cells can be set up quickly and efficiently with minimal burden on the client especially regarding administration and more importantly capital requirements. By creating unincorporated cells, using Hartwell’s no or low capital requirement policies, each cell is able to utilize Hartwell’s statutory capital rather funding their own cell.

The Client becomes a “Sponsor” of the unincorporated cell via the bilateral agreement to the “Participation Agreement”. It is by the far the simplest way to create a cell insurance company but with all the benefits.

The benefits of owning your own Captive Insurance Cell are:

How do we work?

We create Cell Captives in order to take client risk.

Hartwell, using its long experience in the insurance market, will set up the entire Cell from start to finish.

Hartwell issues the policy by and on behalf of the unique cell company.

The client has an insurance policy and knows that all of their premiums pass into a unique cell designated for that specific client.

Hartwell via its management company (Strategic Risk Services) runs the cell.

We tend to use Unincorporated Cell structures as these are the least burdensome to the client and are “Sponsored” by the client but not specifically “owned” by the client.

Hartwell continues to advise and run the cell relieving the client of any and all administrative burdens.

All claims are paid out of the cell funds (Premium which is deposited into the Claim Account).

The client can pay in as much or as little premium as they choose but the cell must be sensibly funded for it to be of benefit.

All Profits are kept within the cell unless the client wishes to release them via a Profit Commission.

Upon winding up of the cell – handled by Hartwell – profits are distributed back to the client.

Hartwell sets everything up.

Hartwell runs the cell.

Hartwell handles the closure of the cell.

The client gains maximum value for minimal workload.

What information do we need to set up a Cell?

We require very basic information for the creation of your cell.Normally the standard underwriting information that you would normally expect to supply to your insurance carrier would be sufficient. We then handle all of the following in order to make the application to the Tennessee Department of Insurance to create your own bespoke Captive Cell.

  
TN DOI Cell Application form
Business Plan
• Loss Runs:
• Actuarial review:
• TPA Agreement:
Participation Agreement
Protected Cell Agreement
Insurance Policy
Underlying Insurance Policies
Additional Information

What are the timelines and processes?

Ideally we need 6 to 8 weeks lead time to complete this process. But it is a process that only needs to be done once.

  • Information presented to Hartwell. We only require your standard underwriting information package;
  • Hartwell indication is given withing 24 hours;
  • Client gives “Firm Order”
  • Hartwell completes all the documentation for Cell Application including:
    • Business Plan
    • Policy
    • Cell Agreement
    • Cell Application
    • Cell Participation Agreement
  • We apply to the Tennessee Department of Insurance to gain their approval;
  • When the DOI grants approval the Cell is active;
  • We open the Cell Bank Account;
  • We issue the Policy by and on behalf of the Protected Cell;
  • We continue to run the Cell and provide advice as required.

Remuneration and Premiums

There are 3 main payments that are required:

  • Premiums: These are all paid into the Cell Bank Account and are kept separate to all other accounts

  • Hartwell Remuneration: We typically charge a margin which can either be a percentage calculated upon the amount of Premium paid or an agreed annual amount. Hartwell margin is the payment for our services and is not used for claims payments.

  • Brokerage: If the client uses a Broker then we offer brokerage at the standard market rates. The broker is never disadvantaged or disinter mediated.

How safe is money placed with Hartwell?

The short answer to this is that money placed with Hartwell is extremely safe.

The detailed answer is as follows:

All client money is kept separate to Hartwell money, Hartwell’s money and that of the client is never, ever co-mingled.

Hartwell employs the services of a professional Management Company that is monitored and approved by the DOI in Tennessee. The Management Company handles all of the client money on behalf of Hartwell as well as Hartwell’s own accounts.

No one can take money out of the client account unless both the Management Company and Hartwell Insurance approve the transaction. Client money can only be taken out of the client account if there is a claim (and associated expenses) to be paid that has been approved and presented by the Claims Management Company appointed to the contract.

  • So client money is kept separate to Hartwell money.
  • No one at Hartwell can withdraw money from the client account without sign off from the Management Company.
  • Money can only be withdrawn from the client account to pay claims that have been professionally handled and approved.

All client money is kept on deposit in cash so there again can be no exposure to the client.

Money kept with Hartwell is super safe. We designed it that way.

SUMMARY

  • Client has a partner whose interests are aligned with their own;
  • Client gets the correct coverage for their needs at a price that is not dictated by an insurance company with their own interests and shareholders to service;
  • Client always knows that they will never overpay because the Profit Commission returns excess Profits;
  • Client always has hard to place business done;
  • Client either owns or is a Participant in their own dedicated Captive Cell Insurance Company;
  • Client can use his preferred TPA to handle Claims;
  • Client gets to build a Fund with his segregated Hartwell Captive Cell whilst always having title to that Fund.

CONCLUSION

For Companies looking to set up their own Captive Insurance Company, by creating a Cell within Hartwell’s PCCIC they will gain the following benefits:

  • SPEED: They will have created their own Cell Captive within 8 weeks from their initial discussions with us
  • SECURITY: The Cell is formed under the Captive Laws of the State of Tennessee and will be legally segregated from Hartwell and all of its other Cells
  • UNIQUE: The Company will have its own micro insurance company giving them the actual coverages that their Company needs
  • SAVINGS: Help match insurance costs to the experience of the company such that a good loss experience is rewarded, reduce external insurance costs and participate in their own profits.

About Demotech

  • Demotech, Inc. is a financial analysis firm specializing in evaluating the financial stability of regional and specialty insurers.
  • Since 1985, Demotech has provided proactive solutions to insurance industry financial analysis issues and has served the insurance industry by assigning accurate, reliable and proven Financial Stability Ratings® (FSRs) for Property & Casualty insurers and Title underwriters.
  • Demotech’s philosophy is to review and evaluate insurers based on their area of focus and execution of their business model rather than solely on financial size.
  • FSRs are a leading indicator of financial stability, providing an objective baseline of the future solvency of an insurer.
  • FSRs are based upon a series of quantitative ratios and considerations which together comprise Demotech’s Financial Stability Analysis Model
  • As the first company to have its rating process formally reviewed and accepted by Fannie Mae, Freddie Mac and HUD, Demotech has been leveling the playing field by providing Financial Stability Ratings® to insurers of all sizes.
  • In order to sustain an FSR of A or better, an insurer must meet their financial criteria quarterly, throughout their annual review cycle. Further, the insurer provides them with information on its reinsurance program and access to a senior officer to discuss operating results.

Definition of “A, Exceptional”

Regardless of the severity of a general economic downturn or deterioration in the insurance cycle, insurers earning a Financial Stability Rating® of A possess Exceptional financial stability related to maintaining surplus as regards policyholders at an acceptable level.

General economic conditions impacting the Property & Casualty insurance industry include, but are not limited to, the rate of claim inflation, interest rates, investment income yields and overall economic activity.

Underwriting cycle conditions include, but are not limited to, overall price adequacy, mix of premium by state, loss and loss adjustment expense reserve levels, reserve adequacy, liquidity, expense levels, utilization of reinsurance, collectability of reinsurance, financial leverage, investments in affiliates, dependency on a particular distribution system, etc.

What our client says