Meta Platforms Inc, the parent company of Facebook and WhatsApp, is awaiting a decision from the Department of Labor to authorise an Employee Retirement Income Security Act (ERISA) exemption to allow its captive to reinsure certain US employee benefits.
Meta has reinsured international employee benefits through its captive since formation in 2020, discussed by the multinational’s director of business risk and insurance Janaize Markland in GCP #51.
The DoL must provide an exemption to permit a US-domiciled captive to reinsure ERISA-governed benefits such as life and accidental death and dismemberment.
Captive Intelligence understands Meta, working with the benefits team at WTW, submitted its original application for the exemption in November 2021 with the DoL now publishing notice of the proposed exemption this week, inviting comments and consultation until 21 January, 2025.
The proposed exemption would allow Meta’s health and welfare benefit plan to enter into a fronting agreement with Prudential Life Insurance Company of America.
Prudential Life Insurance Company of America would then enter into a reinsurance arrangement with Meta’s captive cell, Ekahi Insurance Company that sits within Hawaii-domiciled Honu Insurance Company, LLC
If approved, Ekahi and Meta expect to receive $5.8m in total benefits in the first year of the reinsurance arrangement, and Meta would provide enhanced benefits to participants of $3.9m.
Under the reinsurance arrangement, Ekahi would reinsure risks related to providing group term life insurance benefits, accidental death and dismemberment, benefits, and survivor income benefits.
Captive Intelligence published a long read in February 2023 exploring the DoL’s approach to successful captive exemption applications, and whether there was likely to be greater activity following the successful submissions from Phillips 66 and Comcast in 2022.
Captive Intelligence is aware of one large multinational currently preparing an application for an ERISA exemption to reinsure into its Vermont captive.