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In January, SCA, a Stockholm-based consumer products company with $8.8 billion in 2002 revenues, implemented a global program to cut the costs of its employee benefits without actually reducing their value to employees. The method: underwrite the benefits for its 40,000 global employees through its wholly owned captive insurance company in Dublin, SCA Re. One problem: SCA has 5,000 employees in the United States, and U.S. law requires that before a company may use a captive to finance employee benefits, the captive must underwrite at least 50% of non-corporate business and be domiciled in the U.S. So before SCA could apply its captive strategy to benefits plans for its U.S. workers, it would have to create a new U.S. captive. “We’re in the process of doing that now and are looking at several domiciles, including Vermont and the U.S. Virgin Islands,” says Sofia Tesfazion, SCA benefits manager. She anticipates a captive will be licensed and capitalized within three months.

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