Nexus Re

The word "Nexus" is defined as "a means of connection between members of a group".

Nexus Reinsurance Company was formed in 1998 and is a wholly owned subsidiary of United. Due to the status of United Insurance Company as a (non-controlled) foreign insurer, premium payments to United, including those to the Nexus Re facility (since 1991), had attracted Federal Excise Tax (FET) for most participants. This generated a greater than optimal "frictional cost" base and thus cost-burden, to the participant.

In response to this, Management and Shareholders of United Insurance Company considered this issue and concluded that in order to save a substantial portion of participants' FET, a new subsidiary "Nexus Reinsurance Company" ("Nexus Re") would be established as a separate company. Nexus Re has taken a 953 D Election under the IRS Code and is treated as a U.S. taxpayer, thereby eliminating FET payments made to Nexus Re.

By transferring their own risks, in exchange for accepting the risks of others, the participating captives diversify their portfolio; something which can bring greater stability and predictability to the captive's underwriting results.

Simply put, Nexus Re is a risk-sharing or "pooling" arrangement for primary casualty business. It is the embodiment of some of the basic principles of Insurance; participating members are provided with a long-term and stable mechanism by which risk is spread among all the members of the pool.

• Underwriting Information
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