Frequently Asked Questions

Q: Why Do You Need a Credit Life Reinsurance Program?
A: Reinsurance is the transfer of risk. By assuming a portion of the risk, ICBA Reinsurance has accessed additional income that can now be returned to the bank instead of going to the insurance company. Through participation in ICBA Reinsurance a bank’s share of the profits is returned in the form of tax-advantaged dividend income which is paid over and above sales commissions or service fees the bank may already be receiving.
Q: What is my bank’s liability if the company goes out of business?
A: The stock the bank holds is non-assessable. That means the bank has no liability beyond its stock purchase fee.
Q: When is the soonest I can expect to receive a dividend?
A: Banks become eligible for dividends after they have produced two full years of underwriting experience.
Q: Why do I need to buy stock in ICBA Reinsurance?
A: ICBA Reinsurance requires participating banks to purchase shares of stock in the company for two reasons. First, as a shareholder the bank has a vested interest in placing good business with the company and monitoring the bank’s performance. This benefits all participating banks. Second, by being a shareholder in the company, ICBA Reinsurance can return underwriting profits to the bank more efficiently and profitably in the form of dividends. In most instances, dividends have tax advantages over retros.
Q: What happens if I leave ICBA Reinsurance?
A: The bank remains eligible to receive dividends until all of its business has expired (maximum of three years in the LLC).
Q: Why should I join ICBA Reinsurance?
A: There is no downside to joining ICBA Reinsurance, but many possible benefits. With ICBA Reinsurance your commissions will remain the same, and you can receive additional income in the form of dividends based on your bank’s underwriting experience. You have the oversight of a board of directors made up of community bankers and the support of a highly rated national insurance company. You have all the benefits of your own reinsurance company without the capital expense or administration requirements of forming a captive.