Jim, explain more for our audience what reinsurance
is. OK. Well, we use it a little differently than
what the standard definition of reinsurance is. Let’s take life insurance. You’ve got
a company, a small life insurance company, and they insure an individual for $1,000,000,
and the premium is $10,000. Well, obviously, $10,000 is not enough to pay a $1,000,000
risk. So what that small company will do is reinsure out enough risk so that if they have
a claim, it doesn’t hurt the reinsurance company. So they probably reinsure out $900,000 and
keep $100,000. And a big reinsurance company would get the $900,000. That’s what we do,
except we’ve turned it around. We go from the big company to the little company. We’ve
got a big company that’s an insurance company, or it’s sometimes called a direct writer.
The direct writer writes the insurance, and then it reinsures the business into a small
company. So the question then becomes, how can you cede business, and that’s what it’s
called when you put the business out, it’s ceding business, how can a small company afford
to assume the risk that a big company’s not keeping? And it’s because of the nature of
the business. In our business, all the products are single premium policies. I.E., you get
the premium up front. And then, you pay the claims over the life of the policy. You have
a 5 year car loan, you’re going to be paying the claims over 5 years. But you’ve got the
money up front. So you really have enough money day one in order for the claims to be
paid. And that’s what the Turks and Caicos Islands has understood from 25 years ago.
And they know that this product, or the products in the F&I Department, or the Finance and
Insurance Department, generate enough premiums to pay the claims from day one.