The U.S. Department of Labor (“DOL”) has given final approval for Intel Corp. to use its Hawaii-based captive insurer to reinsure group term life insurance and accidental death and dismemberment policies issued by Minnesota Life Insurance Co.
This approval will allow employers to use a fast-track procedure, called EXPRO, to obtain expedited regulatory review of their prohibited transaction exemption applications. Employers seek DOL approval for employee benefit captive arrangements because such arrangements may constitute prohibited transactions under the Employee Retirement Income Security Act of 1974, as amended. To take advantage of EXPRO, employers must show that two prohibited transaction exemptions were approved by the DOL within the past five years, whose facts are “substantially similar” to the employer applicant.
Intel is the second company in the past two years to gain approval from the DOL to use its captive to reinsure certain employee benefit risks. In March 2013, Coca-Cola, Inc. received final approval to use its South Carolina captive to reinsure group term life insurance and accidental death and dismemberment policies issued by Metropolitan Life Insurance Company.