With the Super CFC, the dealer principal forms and owns the reinsurance company, just like in a standard CFC. However, what makes this structure stand out is its ease of formation and fast implementation. There’s no need to apply for a service contract provider license or go through lengthy regulatory approval processes. That means you can launch your reinsurance strategy faster and with fewer administrative barriers.

Super CFCs use retail cost accounting, which results in initial operating losses and creates a Net Operating Loss (NOL) carryforward. During the NOL period, you pay no taxes, allowing profits to grow within the reinsurance company. This structure is designed for high profit potential, giving dealers the ability to scale earnings while enjoying deferred tax treatment.

A key advantage of the Super CFC is financial flexibility. Dealers can take loans from the reinsurance company, offering access to capital when needed without disrupting the overall program. Additionally, unearned premium releases are available based on reserves and performance, providing more ways to reinvest in your dealership or fuel expansion.

If you’re a dealer looking for the benefits of reinsurance without the licensing hassles and delays of DOWC structures, the Super CFC may be your ideal solution. You maintain full control, access greater profit potential, and avoid unnecessary compliance burdens.