How It Works
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 part of PURE's unique membership model, 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.1 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 an incentive for PURE to deliver great service to our membership 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). After 10 years of membership, you become a PURE Gold member2 and become eligible for annual cash distributions from your SSA.
Helpful Information About Subscriber Savings Accounts
Accessing funds. 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.
However, upon your 10-year anniversary with PURE you become a PURE Gold member and become eligible for annual cash distributions from your SSA.
SSA balance. 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 nine consecutive years.3
Tax information. 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.
1. The precise handling of SSA’s is subject to PURE’s Subscriber’s Agreement and Power of Attorney, with oversight from the Florida Office of Insurance Regulation. PURE’s operating results depend substantially upon the Company’s loss experience. Actual experience may deviate from expected results due to factors including frequency of losses or multiple large losses.
2. PURE Gold is the marketing name used to refer to Senior Members, a designation given to PURE members (policyholders) who have been a part of the membership for 10 years or more.
3. 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.