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Profit participation programs


Build for the future with our profit participation programs

Zurich wants to help you grow your dealership’s revenue potential through our profit participation programs. Profit participation is a critical part of how dealers can generate incremental income from F&I. You can put our F&I products to work building wealth.

Profit participation reviews from Zurich’s National Reinsurance Executives and Regional Finance Executives help identify trends and opportunities to manage and maximize a profitable portfolio. Participate in the profits of the Zurich F&I products you sell.

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)

Ready to learn more

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

Request contact today.

Highlights of Each Plan

Reinsurance - Producer Owned Reinsurance Company

  • 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

Reinsurance - Non-Controlled Foreign Corporation

  • 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 Owned Warranty Company (DOWC):

  • 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

Contingent Commission (Retro):

  • 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