Reimagine Reinsurance


ICBA’s credit reinsurance program strengthens customer relationships while offering its shareholders tax-advantaged dividends

By Audrey Wright-Cipriano

ICBA Reinsurance, a community bank–owned and directed reinsurance captive company operated by ICBA, allows its bank shareholders to earn commission income on the credit life and disability insurance they write, while accessing additional profits through tax-advantaged dividends. By assuming a portion of the risk for credit life and disability policies underwritten by its two partners, Transamerica Financial Solutions Group and the Plateau Group Inc., ICBA Reinsurance can return a portion of the program’s overall underwriting profit to its shareholders.

A longtime participant in the ICBA Reinsurance program, $1.8 billion-asset First International Bank & Trust in Watford City, N.D., has received nearly $30,000 in shareholder dividends. The bank finished 2014 with $1 million in total gross premiums.

Founded 104 years ago by Chief Retail Banking Officer Peter Stenehjem’s great-grandfather, First International Bank & Trust has been an ICBA member for 78 years. According to Stenehjem, it was his father’s tenure as a board member of the ICBA Services Network that led him to first learn about the profit opportunities available through ICBA Reinsurance.

ICBA Reinsurance’s president and CEO, Steve Ello, explains that the dividends shareholders receive are based on their individual underwriting experience for the year and taxed at a favorable rate. “ICBA Reinsurance recently paid shareholders its 12th consecutive dividend and to date has returned nearly $1.5 million to community banks on the program.”

ICBA Reinsurance Program Pays DividendsCommunity bank installment lenders understand the importance of maximizing business relationships to ensure the highest level of financial success for their banks. Through your ICBA membership, your bank can realize even greater profit opportunities when it partners with ICBA Reinsurance.

ICBA Reinsurance allows banks that sell credit insurance to share in the insurance underwriting and premium investment income. This is in addition to the traditional credit insurance sales commission income most banks receive. Along with access to additional income and training, participating banks also receive the full support and service commitment that is synonymous with ICBA. Key program benefits include:

  • No capitalization costs;
  • Oversight by board of community bankers;
  • Tax-advantaged income in the form of dividends;
  • Stand-alone experience based on the underwriting results of your bank;
  • Administrative costs spread across all participants;
  • Non-assessable share of stock; and
  • One-time-only stock purchase fee, based on your bank’s asset size.
    For more information, call ICBA Reinsurance at (888) 790-6625.

Profits, plus protection

Although compelling, bottom-line benefits aren’t the only features of the ICBA Reinsurance program that community banks find attractive.

“Credit and disability insurance have been huge for some of our customers who have had a death in the family or had to go on disability,” says Stenehjem. “It has meant being able to keep an automobile or a piece of equipment or machinery the family needs to earn a living.”

He adds that he has also seen instances when borrowers were not protected by credit or disability insurance and could no longer afford to maintain payments on their loan. These real-life experiences have made him a believer in credit insurance.

As a result, every employee at First International Bank & Trust who has retail and commercial lending authority receives regular training on credit life and disability insurance as part of his or her ongoing professional development. The bank has two in-house corporate trainers who coordinate with ICBA Reinsurance partner Transamerica Financial Solutions Group to offer regularly occurring product knowledge and needs-assessment training. The training is delivered to lenders via the Web and during face-to-face sessions.

Formal sales training is provided to ICBA Reinsurance shareholders at no cost, and bankers can choose from online, self-directed or in-person sessions. “On the lending side, you don’t see many vendors that are willing to send a certified professional trainer out to a client at their own expense,” says Ello. “This is just one of the many facets of our program that underscores our commitment to our shareholders.”

Stenehjem adds that Transamerica’s trainers do a good job keeping the deliverables concise and to the point. “By keeping things very bullet point with some quick hitters, our lenders have been able to retain what they’ve learned.”

First International Bank & Trust’s premium production from the first to second quarters of 2014 supports this statement. Following an in-person training session for new hires, which includes a refresher for existing lenders, the bank’s premium production ballooned from $182,000 to $332,093, jumping nearly 82 percent.

“From a senior management perspective, we’re very happy,” says Stenehjem. “As bankers we don’t want to come across as salesmen. We’re in the business of listening to our customers and assessing what their needs might be.

“It’s really just having people who are well-trained and able to handle those conversations and ask the right questions.”

Audrey Wright-Cipriano ( is ICBA’s director of marketing and brand strategy.