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:

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.

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.