Google Tentatively Approved to Fund Benefit Risks Through Captive

The U.S. Labor Department has tentatively approved Google Inc. to fund several employee benefit risks through its Hawaii-based captive insurance company.

Google filed its application to make the move in November. A department spokesman said the application has been approved, pending a more detailed plan for how the benefit risks will be funded.

The application, which was filed by George O'Donnell, senior vice president at Aon Hewitt, sought an exemption to the Employee Retirement Income Security Act and the IRS code that would allow Imi Assurance Inc. to engage in transactions related to the captive's reinsurance of life, long-term disability and other benefits written by Prudential Insurance Co. of America.

"This exemption for the proposed transactions would enable the plan to provide enhanced benefits, in a cost-effective manner, to those employees whose life, [accidental death and dismemberment] and LTD benefits would be reinsured to the captive pursuant to the proposed transactions," O'Donnell wrote in the application.

According to Google's application, as of December 2010, the captive had assets exceeding $30 million.

Google's request comes at a time when many states are working to promote themselves as captive-friendly domiciles. Delaware, Nevada, Tennessee, New Jersey and the captive leader Vermont have all passed legislation recently designed to bring more captives into the state (Best's News Service, Dec. 1, 2011).

(By Jeff Jeffrey, Washington Correspondent: [email protected])