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Downstream prepares for next phase

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July 9, 2015

“Up to this point, Downstream’s policyholders have benefited from improved coverage and increased sales,” said Tom Simpson of AAA Certified Confidential Security Corp. “However, as the end game comes within sight, the benefits of Downstream are poised to become greater still and the discussion with members changes significantly.”

The Downstream Data Coverage “end game” refers to the creation of a member-owned captive risk retention group, wherein the U.S. government allows companies with similar risks and a demonstrated loss control mechanism to develop insurance products that better address their risks to establish lower premiums. Since it is not practical to predict exactly when the conversion might take place, the board members appointed to oversee the project are working on a formula to give early adopters credit for getting the program going. Nevertheless, all policyholders stand to benefit no matter when they join.

“The formation of a captive program not only has the potential to save the industry millions of dollars in premiums,” said NAID CEO Bob Johnson. “But the policyholders also own any remaining proceeds, which can be paid back as dividends, used to lower premiums even further, or applied to programs to promote the industry. A captive program is not self-insurance, though. It will continue to have the full backing of Lloyds of London and be regulated by the Arizona Insurance Commission.”

In the meantime, Johnson continues to provide sales training to policyholders. Many policyholders report Downstream Data Coverage as one of their best marketing tools. For more information, contact Bob Johnson at