Wells Fargo Insurance Trust group
The Wells Fargo Insurance Trust group is the world’s premier provider of insurance trusts, reinsurance trusts, insurance escrows, and surety escrows. Our group has been involved in the establishment and administration of over 600 insurance and surety related trusts. These trusts have saved our clients over $400 million in credit fees.
We specialize in collateral alternatives and posses the most knowledgeable Insurance Trust servicing team in the industry, enabling us to meet all your insurance collateral related needs. We offer personalized service along with insurance and product expertise that sets us apart from other banks.
Insurance carriers and regulators generally require that corporations involved with self-insurance programs (e.g. Deductible and Captive Insurance Programs) demonstrate that they will always be able pay the claims that they are responsible for. They do this because they don’t want the insured parties to be left “out in the cold” should the corporation not be able to meet their obligations.
Historically, corporations have posted letters of credit to demonstrate their ongoing ability to pay claims. These letters of credit act as collateral. However, they are expensive, increasingly difficult to obtain, and they encumber the corporation’s credit lines.
The Wells Fargo Insurance Trust is a less expensive alternative to Letters of credit. It does not tie up the corporation’s credit lines, and it is accepted by the regulators and most insurance carriers. Here is how it works:
The corporation, the insurance carrier, and Wells Fargo enter into a tri-party agreement in which Wells Fargo acts as the Trustee. The corporation deposits cash (equal to what the letter of credit would otherwise have been) into an account and names the insurance carrier as the beneficiary of the trust. Should the corporation not pay out their claims, the trust money is used to cover the costs.
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