Willis International Practice

International Programs

Locally Admitted

Non-Admitted

Difference in Conditions

Controlled Master

Global

Types of International Global Programs

• Locally Admitted

• Non-Admitted

• Difference in Conditions (DIC)

• Controlled Master

• Global

Locally AdmittedLocally Admitted

Critical Issues

• Completely legal

• Premiums are tax deductible

• Policies are in local language

• Loss of purchasing power

• Lack of uniformity in coverages

• Possible coverage gaps, under-insurance, duplication

• Difficult to monitor solvency of local carrier

Program in which the foreign subsidiaries of a US multinational act autonomously with regard to the purchase of insurance. There is no corporate risk management philosophy acting as a guide for the purchase of insurance.

Locally AdmittedNon-Admitted

Critical Issues

• Bulk buying power

• Broad flexible coverage

• Single Currency

• Worldwide uniform protection

• Illegal in many countries

• Restricted tax deductibility

• Investigation & defense of claims more difficult

• Loss settlement could be taxable

Program consists of a single policy written to provide coverage for all of the foreign subsidiaries of a multinational corporation.

Locally AdmittedDifference in Condition (DIC)

Critical Issues

• DIC policy compensates for deficiencies in local policy• Local policies are purchased making it legal• Tax deductibility of local premiums• Local management can use carrier(s) of their choice• Does not fully utilize bulk buying power• Lack of uniformity in coverage• Duplication of coverage• Possible tax problems for claims paid under • DIC policy

This program is a combination of a non-admitted program and a locally-admitted program. A minimum level of insurance protection is purchased in the local insurance markets by the foreign operations of the multinational, supported by the non- admitted DIC policy purchased in the United States.

Locally AdmittedControlled Master

Critical Issues

• Bulk buying power• Local/central policy control• Enhances local management involvement in loss control• Premium allocation benefits• Eliminates coverage gaps• Legal in local territories• Possible tax liability on claims paid under• Excess/DIC policies• Needs local management compliance

A single insurer provides a Master Policy in the U.S. which acts as Excess/ Difference in Conditions over the policies issued locally by that carrier. Where legal, the Local Policy will mirror the Master Policy. If not legal, local policy will be issued to follow the local laws/regulations and Master policy will come in above local policies in an Excess/DIC capacity. Local coverage is now up to the standards of Corporate Risk Management.

Locally AdmittedGlobal

Critical Issues

• Premiums reflect global size and experience

• More efficient loss control

• Foundation for more risk financing options

• Limited number of carriers

• Unsuitable for large US casualty risks

Combines both the overseas insurance program with the US insurance program using one carrier. Same critical issues as a Controlled Master program, plus others.