Dealer Participation Options
Dealer Owned Warranty Companies
A dealer-owned warranty company is a domestic C-corporation formed to allow Dealers to own their program and remain in complete control. With no premium limitations and low fees, dealer-owned warranty companies offer benefits, unlike any other reinsurance structure. Forming a DOWC allows the Dealer to control underwriting profits and direct the investment choices. Additionally, based on the US tax codes, DOWC offers Dealers different tax benefits when compared to a standard controlled-foreign corporation (CFC). Finally, the Dealer has product customization options made available since they now own the warranty company.
Reinsurance companies have been around for quite some time, yet many Dealers still do not fully understand them. Reinsurance companies are commonly referred to as controlled-foreign corporations (CFC’s) or non-controlled-foreign corporations (NCFC’s). Regardless of which one you choose, they both function in a similar manner. These corporations are are formed in foreign domiciles, which allows for the risk to transfer and ultimately receive preferential tax treatment. Depending on your specific business model, Optimus Warranty Group can guide you as to the best solution.
Profit Share & Non-Participating
For our Dealer customers who do not want to incur any risk and would prefer to profit during each sale simply, Optimus Warranty Group also offers various profit share and non-participating agreements. By forfeiting future underwriting profits, Dealers can decide to take their commissions at the time of sale.