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From the rate filings available from the CA DOI page[1], it appears they are being "fronted" by State National Insurance Co (recently acquired by Merkel[2]). "
by echadwickb 7y ago
From the rate filings available from the CA DOI page[1], it appears they are being "fronted" by State National Insurance Co (recently acquired by Merkel[2]). "Fronting" is a new concept to me, but seems to be a special type of re-insurance[3].
1. https://interactive.web.insurance.ca.gov/warff/front https://interactive.web.insurance.ca.gov/warff/front
2. https://www.insurancejournal.com/news/national/2019/05/02/525317.htm https://www.insurancejournal.com/news/national/2019/05/02/52...
3. https://www.captive.com/news/2018/11/12/what-is-fronting-arrangement-why-do-captive-insurers-use-them https://www.captive.com/news/2018/11/12/what-is-fronting-arr...
- phonon 7y agoMarkel, not Merkel. No, fronting is not reinsurance. It's basically a licensed insurance company that is "leasing out" its license/assisting in regulatory/filing matters for a small percentage of the premium. Tesla doesn't want to set up an actual insurance company, so it's easier to reuse an existing one. Almost certainly there is a reinsurer involved as well (that hasn't been publicly disclosed), as Tesla likely doesn't have excess capital available to fund the surplus requirements for this auto insurance line. https://www.insurancejournal.com/news/national/2019/05/02/525317.htm https://www.insurancejournal.com/news/national/2019/05/02/52...