Powering profit participation programs

Put your dealers back in the driver’s seat

When it comes to vehicle service contracts, the real risk isn’t just mechanical failure — it’s structural misalignment. Whether you're an insurance carrier underwriting F&I profit participation programs or a TPA managing claims and dealer relationships, choosing the wrong profit participation structure can lead to unnecessary tax exposure, trapped capital, and missed strategic opportunities.

MarksNelson specializes in helping stakeholders across the entire F&I vertical – from point-of-sale dealerships to offshore captives – navigate these complex arrangements. And our team combines deep insurance tax expertise with practical consulting to ensure your clients are in the right structure, for the right reasons, with the right outcomes.

Trusted by carriers, TPAs, and agents across the automotive warranty lifecycle

Our team brings deep technical expertise and practical solutions to help your clients meet specific goals:

• Tax minimization vs. investment return
• Access to cash for business expansion
• Estate planning integration
• Employee retention

The right structure to meet your client’s goals

Profit participation programs are not one-size-fits-all. Whether you’re looking for greater access to cash, long-term wealth building, tax advantages, or something else entirely, our experienced consultants can help you find the program most advantageous to you:

• Producer Affiliated Reinsurance Company (PARC) – Allows producers to take on a share of the underwriting risk and earn a portion of the profits.
• Non-Controlled Foreign Corporation (NCFC) – Often used by large auto dealerships to participate in F&I profit, share risk, and defer income tax.
• Dealer Owned Warranty Corporation (DOWC) – Owned by dealers as the direct provider of service contracts, allowing them to control profits and cash flow.
• Super Controlled Foreign Corporation (Super CFC) – A combination of the regulatory ease of a PARC with the benefits of the retail accounting and tax deferral associated with a DOWC.
• Retrospective Commission – Allows dealers to participate in contract underwriting income while offering the potential for a yearly commission with minimal involvement.

• Insurance tax specialists first: Our leadership team includes former Big Four insurance tax professionals with decades of experience in federal, state, and international tax strategy.
• Technical rigor, real-world impact: We’re known for offering thoughtful, defensible insights that support clients in making confident, informed decisions.
• Embedded in the industry: We consult for major carriers and support TPAs across the country. Our insights shape how service contracts are structured, sold, and taxed.