Ask the Expert: Reinsurance FAQs for 2022

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Expert Bio

David DeCredico

Senior Vice President of Wealth Building and Strategic Accounts

David DeCredico joined APCO as Vice President for Reinsurance Programs in 2004 after spending the early part of his career in Public Accounting. David holds a Bachelor of Arts degree from Wake Forest University and a Master of Science in Management from the Georgia Institute of Technology. David is also a licensed Certified Public Accountant. After managing APCO’s Business Development team for several years, Dave took on the role of Senior Vice President of Wealth Building and Strategic Accounts in 2021.

Q. Once I’ve gone down the path on a particular reinsurance structure, does it ever make sense to change that approach?

There’s not a one-size-fits-all solution, and your reinsurance provider should be able to provide a clear overview of your options.

Q. How do potential changes in tax policy impact my reinsurance program?

It’s hard to know where we’re going to end up when it comes to tax policy...

Q. When and how often should I be evaluating my program’s performance?

Set it and forget it is not the approach here...

Q. In determining which reinsurance / participation program is the best fit for my goals and objectives, what are the most important things to consider?

Do your homework and evaluate all of the different structures available to you...

Q. My accountant mentioned that my participation in a reinsurance company requires that certain disclosure statements be filed along with my tax return. Should I be concerned with the information being requested on these disclosures?

I speak to some of the disclosure requirements with regard to reinsurance company participation in my response to question 1 above...

Q. In 2021, I transferred surplus amounts from my reserve account into a “B” account. What are the tax ramifications of this transfer?

This question speaks specifically to owners of CFCs...

Q. In preparing for tax filing season, with regards to my reinsurance company, what information should be provided to my CPA in order to properly complete my 2021 individual tax return?

During tax filing season, I speak with a number of our Dealer’s tax preparers with regards to their reinsurance companies...