The exporter’s packages are intended for the insured person whose main external exposure is related to the exported product. The exporter’s package is not intended to cover an insured person who has a permanent residence abroad. This policy fills in the gaps in the policyholder’s internal general commercial liability (CGL) policy regarding product liability coverage. That is, it covers product liability claims arising from accidents occurring in a foreign country where the loss or damage results from the sale of the product outside the United States. The policy may also cover personal injury or damage in the United States if the claim is filed outside the United States. Exporter’s package policies are designed for small and medium-sized companies. In addition to product liability, these packages typically include general liability coverage for overseas travel, motor vehicle liability insurance, and voluntary compensation for foreign workers (FVWC) insurance. Additional coverage options include property insurance for sample sellers and exhibit property, business income, shipping, and coverage for various crimes (such as kidnapping and ransom).
The 10/10 Rule is a matter of analyzing and demonstrating the transfer of risk as a precondition for the use of reinsurance accounting, which was codified in the early 1990s with the adoption of Financial Accounting Standard (FAS) 113 (and its statutory counterpart, SSAP 62). FAS 113 itself was a response to alleged abuses and set the standard for testing whether something should be called an insurance contract. FAS 113 required that the transfer of risk be demonstrated by comparing the present value of the cash flows associated with the contract and, in particular, by exceeding certain thresholds of “significance” of risk. The thresholds, often referred to as the 9a and 9b tests, are: 9a. The reinsurer assumes significant insurance risk under the reinsured parts of the underlying insurance contracts. 9b. It is possible that the reinsurer could suffer a significant loss from the transaction. While neither “significant” nor “reasonably possible” was defined in this context, standard rules of thumb quickly emerged in the implementation of FAS 113. The most commonly cited is the “10/10 Rule”. This rule states that a contract reaches a threshold if there is at least a 10 percent chance that it will suffer a loss of 10 percent or more in present value (expressed as a percentage of the contract premium ceded).
401(k) Fee Claims are claims alleging that those responsible for administering a company’s 401(k) retirement plan allowed the plan’s providers to charge excessive fees. Over many years, even a small difference in the amount of fees charged for administering such plans can have a significant impact on an employee’s balance sheet at the end of that period. Assume that a 401(k) plan investment returns 5 percent annually over a 40-year period. Let’s also assume that an employee contributes $7,500 per year to the plan. If the employee pays 2% per annum during this period, his balance will be $565,509.45. But if the annual pay were reduced to 1.5 percent, a reduction of just ½ percent, the worker’s balance would increase to $634,127.08, a difference of $68,617.63. 401(k) plan fee claims can be especially costly if multiple affected employees file such a class action lawsuit. Fortunately, 401(k) benefit claims are covered by the fiduciary liability policy, since such plans are governed by the Employee Retirement Security Act (ERISA).
A 401(k) plan is the most common type of defined contribution plan in which employees choose to set aside a portion of their compensation. Under a typical 401(k), employees contribute between 1 and 15 percent of their annual pre-tax salary to the plan each year. In addition to this amount, many employers pay an employee contribution, such as 50 to 6 percent of the employee contribution. For example, if an employee contributes 6 percent of their salary to a 401(k) plan, the employer will contribute an additional 3 percent so that the employee saves a total of 9 percent of their annual salary (i.e., 6 percent contribution plus 3 percent employer contribution). There are annual maximum amounts that employees can contribute, as well as distribution limits under the age of 59.5.