• Producer Owned Reinsurance Companies (PORC) must be viable predicated on a certain volume
• Minimum volume (VSC) 25-30 contracts monthly or 300 to 350 contracts annually
• Discussion on the volume for GAP AND ANCILLARY PRODUCTS must be done on a case by case basis
• PORC can assume 1.2 Million of risk/premium (non-life insurance) i.e. P&C risk/premium

Benefits

• ASSET RETENTION can remain in the corporation indefinitely
• Lowest tax rate for any corporation
• Cash disbursements are subject to Capital Gains taxation. Loans are also another alternative

Expenses/Fees

• Formation of the PORC is about $3500 for a onetime initial cost
• Accounting, tax return, and charter fee amounts to about $2,500 annually which is deducted from the reserve pool
• Fees per policy ADMIN, INSURANCE, etc. (VSC)

1120 PC CORPORATION

• Corporation is formed as a CONTROLLED FORIGEN COORPORATION
• EIN TAX ID NUMBER is applied for and a US TAX RETURN is filed
• There can be several shareholders of the corporation

TAXATION

• A ONE-TIME election to pay taxes either on the investment or the underwriting profit?
• This election is a permanent election