With our industry-leading Reinsurance and Dealer-Owned Obligor Company (DOOC) plans, we allow our dealer partners to utilize their claims reserves and underwriting surplus to help grow their business or create long-term wealth. This is accomplished through two primary vehicles – Producer Affiliated Reinsurance Companies (PARCs) or Dealer-Owned Obligor Companies.
Equitas offers industry leading Producer Affiliated Reinsurance Company (PARC) plans to access underwriting surplus and dealers can even collateralize unearned premium reserves to borrow money to grow their business.
For dealers that choose to utilize Equitas (and it’s outside vendors) will assist dealers with setting up an offshore Producer-Owned Affiliated Reinsurance Company. Once the PARC is formed, when a dealer pays Equitas and its affiliated obligor a “dealer cost”, Equitas and its obligor will deduct its administrative fee and then “cede” the remaining premiums to the Obligor’s captive. The Obligor’s captive insurance company then enters into a treaty with the PARC, which then assumes the reserves utilized to pay claims. Every month Equitas generates a PARC cession statement. This cession statement shows the unearned premium reserves, the earned premium reserves, and the paid claims. The remaining available amount (minus any required holdback and incurred but not reported [IBNR] claims) is payable to the PARC (and thus the shareholders of the PARC) as underwriting surplus.
Dealer-affiliated PARC’s can then chose to distribute this surplus, invest the surplus, or borrow against the surplus. This is often a huge source of revenue for dealer partners. For PARC’s with less than $2,900,000 in premiums per year (as of the 2026 tax year), premiums are exempt from taxation (until they result in underwriting distributions) – only investment income is taxed. This can provide a major strategic tax-deferral benefit for participating PARC’s *.
Also, for Dealers who have PARC’s that have acceptable projected loss ratios, Equitas offers an industry-leading collateralized loan program! This program allows dealers to borrow up to 50% of their unearned premium reserves and 100% of any underwriting surplus to help finance operations, expansions, or invest in other business growing assets. For context, for a single store selling 100 new or used vehicles per month, with a 50% F&I product penetration rate, this generally translates to over $250,000 per year in available collateral to borrow against (this is based on 2026 numbers).
For dealers who don’t want to use collateral or surplus based loans, Equitas is one of the only companies in the industry with its own investment advisory service, Equitas Investment Advisors, LLC (“Equitas Asset Advisors”). While dealers are not required to use Equitas Asset Advisors, by going with Equitas Asset Advisors to manage the investment strategy of the PARC, dealer partners can be presented with a competitive range of investment strategies that are tailor-made for the automotive F&I industry. These strategies are developed by industry experienced professionals and present dealers with aggressive, moderate, and conservative risk strategies.
Please speak with your agent for more information about the benefits of setting up a producer affiliated reinsurance company with Equitas today**!
* Please seek proper investment advice from a licensed CPA firm. Equitas is not a licensed CPA and cannot provide tax advice to dealers, agents, or any other individual or business entity.
** Please note, agents are NOT CPAs, or employees of Equitas Asset Advisors, LLC. Rather, they can provide basic marketing materials and answer questions about the benefits of Equitas programs VS. competitors. For detailed information about investment products and strategies, please ask your agent to set up a call with an Equitas professional.
A Dealer Owned Obligor Company (DOOC) is another vehicle for dealers to access their underwriting surplus and access capital to grow their businesses through their F&I distribution channels.
For dealers electing to set up a DOOC, Equitas and outside counsel will assist the dealer with setting up a separate company - or the dealer itself depending on the decided upon strategy – with an Obligor company. This Obligor company is typically required to have a service contract provider license with the various states that it is licensed in (not all states require a license – each state is different). Once the appropriate licenses are obtained, the DOOC typically has to file product forms with the various states it operates in (please note, not all states require a form filing) as well as with the various lenders the dealer utilizes for financing. Equitas and its outside partners have the industry expertise to assist dealers wishing to set up DOOC’s with this entire process. Once the appropriate licenses are obtained and forms approved, the dealer can begin using their own DOOC!
Similar to a PARC, when a dealer sells a F&I product, Equitas will deduct its administrative fee and then cede the remaining amount directly into the DOOC. The funds are then deposited into a collateral trust account that is held by and between the dealer and the CLIP insurance provider.
Every month a cession statement is generated that shows the unearned premium reserves, the earned premium reserves, and the paid claims. The remaining available amount (minus any required holdback and incurred but not reported [IBNR] claims) is payable to the DOOC as underwriting surplus.
DOOC’s have the option to distribute the surplus or invest the surplus. Like with the Equitas PARC program, DOOC’s also have additional options for income development and to grow their businesses as well! For Dealers who have DOOC’s that have acceptable projected loss ratios, Equitas offers an industry-leading collateralized loan program! This program allows dealers to borrow up to 50% of their unearned premium reserves and 100% of any underwriting surplus to help finance operations, expansions, or invest in other business growing assets. For context, for a single store selling 100 new or used vehicles per month, with a 50% F&I product penetration rate, this generally translates to over $250,000 per year in available collateral to borrow against (this is based on 2026 numbers).
For dealers who don’t want to use collateral or surplus based loans, Equitas is one of the only companies in the industry with its own investment advisory service, Equitas Investment Advisors, LLC (“Equitas Asset Advisors”). While dealers are not required to use Equitas Asset Advisors, by going with Equitas Asset Advisors to manage the investment strategy of the DOOC, dealer partners can be presented with a competitive range of investment strategies that are tailor-made for the automotive F&I industry. These strategies are developed by industry experienced professionals and present dealers with aggressive, moderate, and conservative risk strategies.
Please speak with your agent for more information about the benefits of setting up a producer affiliated reinsurance company with Equitas today**!
* Please seek proper investment advice from a licensed CPA firm. Equitas is not a licensed CPA and cannot provide tax advice to dealers, agents, or any other individual or business entity.
** Please note, agents are NOT CPAs, or employees of Equitas Asset Advisors, LLC. Rather, they can provide basic marketing materials and answer questions about the benefits of Equitas programs VS. competitors. For detailed information about investment products and strategies, please ask your agent to set up a call with an Equitas professional.
