Subscriber Savings Account FAQs
An SSA is a notional account held for each active PURE member, into which PURE may allocate surplus. These funds remain on PURE’s balance sheet and are available as part of its overall claims-paying ability, but provide a vehicle for members to participate in PURE’s continued surplus growth. In broader terms, SSAs are an important component of PURE’s long-term capital management strategy and help us keep the cost of insurance low.
SSAs are a tangible demonstration of PURE’s alignment with its policyholders, as they allow members to share in PURE’s successful results. They also create a long-term advantage to PURE and enable us to grow our surplus in a highly efficient manner, because any profits that are allocated into these accounts are not taxable.
Based on PURE’s overall results, a total allocation is established. Each active member will receive a portion of the total allocation. That portion is related to the pro-rata percentage of earned premium that s/he paid that year.
Here’s how earned premium works: A member paying $10,000 per year in annual premiums whose policies were active throughout the given year would have $10,000 of “earned” premium. A member paying the same $10,000 who only joined PURE on July 1st would be credited with $5,000 of “earned” premium for that calendar year. This second member would receive an allocation equal to half of the first member’s allocation.
In 2012, the median allocation to SSAs is approximately $65. The largest allocations are nearly $2,200.
For members who may have joined late in 2012, we opted not to make allocations where the earned premium proportion would have resulted in an account of less than $10.
Yes. PURE allocated $1,000,000 of 2010 policyholder surplus into SSAs.
PURE is committed to allocating net underwriting profits to SSAs. Further, when PURE realizes surplus growth in a given year, subject to the approval of the Florida Office of Insurance Regulation, PURE intends to allocate that surplus growth into SSAs.
Can I make deposits into or withdrawals from a Subscriber Savings Account just like a regular bank account?
No; your SSA is not an account that you can withdraw from or deposit into, nor can you take out a loan against it. Your SSA is a notional account kept in PURE’s accounting records, not a personal bank account.
SSAs should create a long-term tax advantage for PURE because any profits that are allocated into these accounts are not taxable. This will allow PURE to grow its surplus in a highly efficient manner for the benefit of the membership. For members, SSA allocations are not considered income and should not be taxable, so long as the premiums originally paid for insurance were not treated as a tax deduction. We recommend that you consult your tax advisor or estate planner with any tax questions.
- Each year, PURE will distribute annual SSA statements to active members. We encourage you to contact Member Services at (888) 813-PURE (7873) or your agent at any time to receive the most up-to-date status of your balance.
SSA balances do not earn interest, but grow with each additional allocation. In any year when PURE’s statutory surplus grows, PURE intends to make an allocation to SSAs. Allocations are subject to approval by the Florida Office of Insurance Regulation.
Members who terminate their membership with PURE are eligible to collect the balance of their SSA. Distributions will be made within six months of the date the member’s last policy was effective, assuming policies have been paid in full. In the event of a member’s death, the SSA will be transferred to the surviving spouse. If there is no surviving spouse, payment will be made to the deceased member’s estate.
Members should not expect to receive a distribution from their SSA in the near future. Our primary responsibility is to act as stewards of our members’ capital, to grow surplus responsibly for the membership, and to do this in such a way that keeps the cost of capital low. As such, we do not have plans to make distributions at this time. Utilizing SSAs helps PURE deliver stable, highly competitive premiums.
I understand that my SSA balance may be used by PURE to pay claims in the event of a major catastrophe. Is there any risk of further assessment?
No, there is no risk of assessment from PURE. While it is true that a member’s SSA balance remains available to PURE to pay claims in the event of a catastrophe or other significant loss, PURE only issues non-assessable policies. A member’s liability to PURE is limited to the cost of his/her policies.