PURE will make an allocation of $25,000,000 into Subscriber Savings Accounts (SSAs) for the 2016 calendar year. This marks the fifth consecutive year in which we’ve made an allocation. To date, nearly $45,000,000 has been allocated back to the membership through SSAs.
SSAs Are a Valuable Benefit of Membership with PURE
Every insurance company requires capital (often referred to as policyholder surplus) in order to prudently manage the risk of the policies issued. However, capital management strategies can vary greatly depending on the insurance company’s ownership model. As a member-owned (policyholder-owned) insurance company, PURE may allocate a portion of its total capital to individual members through SSAs. This allocation provides beneﬁts to both PURE and its membership:
Benefits to PURE
The funds held within SSAs remain on PURE’s balance sheet and are available to PURE to meet claim and expense obligations. This contributes to PURE’s ﬁnancial strength and keeps its cost of capital low by reducing the reliance on expensive third-party capital. In addition, SSA allocations can reduce PURE’s taxable income, so they contribute to PURE’s ability to grow its capital in a highly efficient manner.
Benefits to Members
Because these funds remain on PURE’s balance sheet, they help to keep premiums low. They also provide incentive for PURE to provide you with great service because, in the event you leave PURE, the funds within your SSA at that time (less any premiums owed to PURE) will be returned to you (or your estate in the case of death).
Frequently Asked Questions
Can I access these funds or apply them to premiums I owe?
While this account is held in your name, you cannot withdraw from it, nor can the balance be used to pay your premium. The funds within it will remain on PURE’s balance sheet to support PURE’s overall claims-paying ability, beneﬁting the membership as a whole.
How does the balance of my SSA increase?
Your SSA balance can increase only as the result of future allocations. The balance does not earn interest and you cannot make deposits into this account. While future allocations are not guaranteed, PURE has made an allocation in each of the past five consecutive years.*
Will money held within SSAs ever be distributed?
If at any point management believes the total available surplus is more than what is necessary to protect the membership, it may make a distribution from SSAs. That said, our focus is growing surplus responsibly for the membership, and there are no plans to make distributions or “dividends” from SSAs at this time.
What are the tax consequences to me of my SSA?
SSA allocations are generally considered a return of premium so, unless you have a unique circumstance that enabled you to deduct the original cost of your PURE policies from your taxable income, the SSA allocation should not create a taxable event. However, PURE is not a tax advisor and suggests you consult your ﬁnancial planner or tax preparer with questions or for advice.
Should you have any additional questions on SSAs, please contact us at 888.813.7873, or at firstname.lastname@example.org.
*Since SSAs remain on PURE’s balance sheet and are available to PURE to meet its claim or expense obligations, your SSA balance could decrease in the extreme event that the funds were utilized for that purpose. This unlikely scenario has not happened in PURE’s history, nor do we have any reason to believe that it will occur in the future.