Discretionary Mutual Insurance Portfolio "DMIP"

DMIP's are a unique insurance concept developed by Commercial Pacific Insurance Ltd "CPI" for the purposes of offering an easy to manage and economically viable hybrid captive insurance product for smaller commercial operators engaged in the aviation and marine fields.

Self-insurance is often deliberate. If a particular type of insurance coverage is so expensive that it is economically unreasonable to purchase the coverage, the person or business exposed to that risk will often take on the risk rather than pay an insurance company to assume it.

A DMIP insurance product is similar to "captive insurance" and can help you to formalize and tailor your risk management program, and may allow you to reserve for these self-insured risks in a tax-advantaged way.

DMIP is part of CPI's discretionary insurance range of products where each (aviation or marine) insurance policy issued by CPI is managed in a collection of similar type insurance policies from various policyholders combined (or co-mingled) together as one single mutual portfolio but, with performance apportioned to individual insurance policies, at CPI's discretion.

Note:-    CPI's DMIP is designed only to cover Aviation and/or Marine Hulls for material damage and loss, DMIP is not designed to cover legal liability risks or any other consequences of the aircraft and/or marine hull.

In simple terms, CPI will issue an insurance policy either for an aviation or marine risk in similar terms to that of what is ordinarily available on the world markets however, the big difference is that any benefits, if at all, payable under the policies are entirely at CPI's discretion.

The structure of the insured value is expressed in the word "compensation" which is the term used to describe the method of insurance payout.

Compensation should not be less than for the total of the premium paid combined with any earnings on that premium and, where applicable the DMIP structure, which may be expressed as a no claim bonuses and/or promotional bonus but, after administrative costs are deducted.

The premiums charged on a DMIP policy are considered and calculated on every individual risk and can be tailored to suit both the insurance company and the client.

The benefits of a DMIP policy are:-

• Affordable insurance cover
• Very few policy restrictions as to usage
• Tax deductible premiums with the potential to recover unused monies
• A structured self-funding risk management programme
• Discretionary mutual fund advantages
• Offshore asset protection
• Low cost establishment and management costs
• All administration carried out by Commercial Pacific Insurance Ltd

While there are obvious tax advantages available to most DMIP policyholders, in most jurisdictions, those advantages should not be considered as the primary reason for taking out a DMIP insurance policy.

Any taxation advantage or disadvantage should be considered in light of your individual circumstances by a financial advisor and/or accountant.

Standard DMIP Costs

Based on: Min' AUD$35,000 annual premium
Five percent (5%) of annual premium
20% of any no claim bonuses and/or promotional bonuses due

Additional fees may be charged for work requested by the policyholder in addition to the usual administration of a policyholder's insurance policy.

Commercial Pacific Insurance Ltd through its authorised intermediaries can provide free advice and information in relation to this unique product and help tailor a policy for your specific requirements.

For further information please contact:

The Manager "Captive Bureau"
Commercial Pacific Insurance Ltd'
Level 1 Anchor House
Lini Highway Port Vila Vanuatu
Ph: Int: 678 - 28062
Fax: Int: 678 - 28069
Email: cpi@vanuatu.com.vu

The content of this page is intended to provide a general guide to the subject matter. Specialist advice should seek about your specific circumstances.