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Sun Life partners with Pareto to enter U.S. stop-loss captives market

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Sun Life Financial and Pareto Captive Services in October 2017 announced a new stop-loss group captive solution, Legend Re, which will be available in the U.S. for policies effective January 1, 2018. The initiative is designed to reduce claims volatility for small and medium self-funded employers or fully-insured employers transitioning to self-funding in order to realize cost savings.

Employers in a group captive typically have under 500 employees, are like-minded, and committed to wellness and cost containment programs in order to keep health costs lower, as well as allow them to share a portion of their self-funded risk, reducing claims volatility, and make them a viable option for small and medium-sized employers looking to self-fund their medical benefits.

A key driver for self-funding is cost savings, while key barriers include the “unknown” around claims volatility and financial risk, both of which can be addressed through a group captive solution.

Sun Life’s research in the U.S. shows that 4 out of 10 fully insured employers would consider switching to self-funding and 70 percent of those would consider using a captive solution when switching. Research also showed that 8 of 10 brokers expect at least one of their clients to utilize a captive in the future.

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