Profit Participation Programs

Ensure future growth with our profit participation programs.

Surety Protect aims to assist in increasing your dealership's revenue potential by offering top-tier profit participation programs. Profit participation plays a key role in enabling dealers to earn additional income from F&I services. Leveraging our F&I products can aid in wealth accumulation. Our expertise allows us to pinpoint trends and prospects for effectively managing and enhancing profitability within your portfolio.

Types of profit participation plans offered:

Reinsurance

Producer Owned Reinsurance Company (PORC),

aka Controlled Foreign Corporation (CFC)

Non-Controlled Foreign Corporation (NCFC)

Dealer Owned Warranty Company (DOWC)

Contingent Commission (Retro)

Advanced Loan Structure

Highlights of Each Plan

  • Most common structure in the marketplace

    Dealer owns it – no pooling with other dealerships’ F&I business

    Formed as a “c” Corp – dealer chooses company name, directors, officers and shareholders

    Ownership structure flexibility

    Most common domicile is the Turks and Caicos Islands

    IRC Section 953(d) election – treated as a domestic insurance company under the IRC

    US tax return and annual statement are completed each year

    Assets/cash are normally held in trust at a US bank (money never leaves the US)

    Dealer/owner flexibility:dividends, loans, surplus investments

  • Domiciled in an offshore country

    Ownership is represented by purchasing preferred, non-voting stock

    No annual premium thresholds

    Company decisions are made by the Board of Directors, hence, no control by the shareholders

    Tax returns and annual statements are not reported to the IRS

    Not subject to federal income tax, but pays a federal excise tax of 1% of net written premium

    Shareholder

    Passive Foreign Investment Company (PFIC) exemption*

    *Quantitative threshold test requires the insurance company to qualify as an insurance company under IRS code and have liabilities which are more than 25% of the total assets of the company (F&I unearned premium reserves do not count as liabilities). This “test” was part of the 2017 Tax Cuts and Jobs Act.

  • Dealer forms a new corporation (C Corp) in the state of the producing dealership(s)

    DOWC is the obligor, but not a licensed insurance company

    DOWC registers as a service contract provider in the states it will do business in

    Program is administered by a third party, in this case Zurich

    A failure-to-perform contractual liability policy (CLP) is included in the program

    Minimum capital may be higher than PORC or NCFC structures ($50,000 - $500,000)

    Trust account requirement is at the discretion of the administrator/CLP provide

  • No upfront money to participate

    Minimal investment income paid

    No downside risks

    No dealer control or decision making

    Retro payments are normally paid to the dealership

  • Our advanced loan program helps the dealers achieve their individual financial goals and offers flexibility for usage to navigate through today's challenging automotive market.

Ready to learn more

Let’s review your goals to discover the best profit participation program for your dealership.

Request contact today.