Program revenue
Start with the amounts the governing agreement includes in the participation calculation—not an assumed gross-premium figure.
Eligible dealers can participate in positive net CPI program results without starting a separate reinsurance company.See how CPI participation works
Protect the collateral. Participate in the performance.
CPI Profit Participation for Dealers—Without a Reinsurance Company
CPI profit participation for dealers gives eligible BHPH operations and auto lenders a contractual path to share positive net Collateral Protection Insurance program results, if earned—without forming, owning, capitalizing, or managing a separate dealer-owned reinsurance company.
Participation is eligibility- and agreement-based. Positive results and distributions are not guaranteed.
A simpler path to participation
Share positive net CPI results without building another company.
Traditional dealer-owned reinsurance can provide meaningful ownership and control, but it can also introduce entity formation, capitalization, governance, accounting, tax, reserve, and ongoing management responsibilities. ACP offers eligible dealers a different path: participate through the CPI program agreement while the approved insurance and administrative parties retain their defined roles.
What the model is designed to do
Connect protection and participation—without confusing the two.
The CPI program must first protect the creditor’s interest and operate through accurate tracking, notices, placement, corrections, claims support, and reporting. Participation comes after the program’s actual results are calculated under the agreement.
Review My Participation PathHow net results are determined
Start with the formula. Then test every input.
“Profit participation” should never be evaluated from a projected percentage alone. Dealers need to see what enters the calculation, what comes out, when reserves are established or released, and when a result can become distributable. The CPI cost and pricing guide provides a separate framework for comparing total program economics.
Compare My Current Economics✓
Paid and incurred claims
Account for covered losses already paid and claim obligations recognized during the applicable reporting period.
Claim reserves
Hold appropriate amounts for reported, developing, or other covered claim obligations as the agreement and program require.
Program expenses
Deduct the insurance, administration, tracking, servicing, taxes, assessments, and other expenses specifically defined in the agreement.
Reconciliation and timing
Apply the program’s accounting period, corrections, reserve releases, thresholds, and distribution conditions before determining whether positive net results exist.
Two participation paths
Contractual CPI participation or dealer-owned reinsurance?
Neither structure should be selected by label alone. Compare ownership, capital, control, professional oversight, economics, and operating responsibility against the dealership’s scale and long-term objectives.
Participate without owning a reinsurance company
Designed for eligible dealers that want a contractual share of positive net CPI program results without forming, funding, governing, or managing a separate reinsurance entity.
Own a dedicated risk-participation structure
May provide greater ownership and control, while also requiring entity formation, capitalization, reserves, governance, accounting, tax planning, and specialized professional oversight.
The CPI program must perform first
Both paths depend on actual program terms and performance. Claims, reserves, expenses, administration, compliance, and portfolio behavior matter more than a projected headline return.
Choose the responsibility you are prepared to carry
Evaluate scale, desired control, capital, risk tolerance, operating resources, time horizon, tax and legal guidance, and the dealership’s ability to oversee the structure.
Eligibility before projections
What ACP reviews before discussing participation.
Eligibility is program-specific. ACP begins with non-sensitive portfolio ranges and operating facts so the dealer can evaluate fit without uploading borrower files, policy documents, account numbers, or other sensitive data through the public form.
Portfolio size and composition
Active accounts, average balances, monthly originations, vehicle mix, contract terms, and the states in which the dealer operates.
Insurance and loss experience
Current insurance verification, lapse and placement patterns, claims history, uninsured losses, cancellations, corrections, and refund activity.
Data and servicing readiness
System capabilities, data quality, staff responsibilities, borrower communications, documentation, reconciliation, and escalation processes.
Contract and state requirements
Retail contract authority, approved products and parties, state availability, notices, charges, licensing, compensation, and vendor oversight.
Current program structure
Coverage, program costs, tracking and administration, claims support, existing participation, termination rights, and transition considerations.
The dealer’s preferred path
Desired simplicity, control, capital commitment, time horizon, reporting expectations, and whether reinsurance ownership is a future goal.
Reserves and timing matter
Positive performance is not the same as an immediate payment.
A sound review separates accounting results from distributable results. Claims can develop after the reporting period, reserves may need to remain in place, and the agreement may require reconciliation or minimum conditions before a distribution is considered.
ClaimsPaid and incurred losses can reduce or eliminate positive program results
ReservesAmounts may be held for developing or future covered claim obligations
ExpensesOnly the agreement identifies every applicable cost and deduction
TimingReporting, reconciliation, thresholds, and distribution schedules can vary
Clear roles protect the dealer
Know who is responsible for every part of the program.
Participation does not make the dealership an insurance carrier or transfer regulated authority by implication. The final agreements must identify each party, function, obligation, escalation path, and source of reporting.
Dealer or lender
Provides accurate portfolio data, maintains contract and servicing controls, oversees vendors, supports borrower communication, and follows the approved workflow.
Auto Capital Protection
Coordinates the dealer relationship, evaluates program fit, explains the participation path, supports implementation, and provides defined escalation access.
Approved insurance parties
The authorized carrier, producer, and other regulated parties perform the insurance functions assigned to them by law and contract.
Administrator and technology
Handles the contracted tracking, document intake, notices, placement workflow, reporting, reconciliation, claims support, or other assigned services.
Questions to ask any CPI provider
Do not compare participation from one sales number.
Ask for the written structure behind the projection. A credible program should make the calculation, responsibilities, reporting, timing, and downside visible before enrollment.
What exactly is shared?
Request the defined source of program revenue and the precise contractual basis for any dealer share.
Which claims and reserves count?
Understand paid, incurred, reported, developing, and reserved obligations—and who establishes or releases them.
Which expenses are deducted?
Identify insurance, administration, tracking, taxes, assessments, servicing, technology, and every other stated charge.
When is a result distributable?
Confirm reporting periods, reconciliation, minimum thresholds, reserve requirements, approval conditions, and payment timing.
What happens after a poor period?
Ask whether losses carry forward, how deficits or reserve shortfalls are treated, and whether the dealer has any additional obligation.
What happens if we leave?
Review termination, run-off, claims, records, refunds, transition support, and the treatment of undistributed program results.
Dealer CPI participation FAQ
Understand the economics before you qualify.
These answers explain the model at a high level. The approved policy, program agreement, participation agreement, state requirements, and each party’s actual role control.
What is CPI profit participation for dealers?
CPI profit participation is a program-specific contractual arrangement under which an eligible dealer may receive a share of positive net CPI program results, if any. The governing agreement defines the formula, expenses, reserves, reporting, timing, eligibility, and distribution rules.
Does a dealership need to form a reinsurance company to participate?
Not under ACP’s participation path. Eligible dealers can contractually share positive net CPI program results without forming, owning, capitalizing, or managing a separate dealer-owned reinsurance company. Dealers seeking more ownership and control can separately evaluate a dedicated reinsurance structure with qualified legal, tax, accounting, and insurance professionals.
How are positive net CPI program results calculated?
The exact formula is defined by the approved program agreement. Depending on that agreement, the calculation may account for program revenue, paid and incurred claims, claim reserves, insurance and administrative costs, tracking or servicing costs, taxes, assessments, and other stated expenses. ACP will review the actual calculation rather than relying on a headline percentage.
Are CPI participation profits guaranteed?
No. Claims, reserves, expenses, portfolio performance, contract terms, state availability, and timing can reduce or eliminate positive net results and any distribution. Past performance does not guarantee future results.
When could an eligible dealer receive a distribution?
Distribution timing varies by agreement and may follow defined accounting periods, claims development, reserve requirements, reconciliations, minimum thresholds, and other program conditions. A dealer should understand both the measurement period and the payment conditions before enrolling.
What determines whether a dealer is eligible?
Eligibility may depend on portfolio size and composition, monthly originations, operating states, insurance and servicing practices, data quality, loss experience, implementation readiness, and the requirements of the approved carrier, producer, administrator, and participation agreement.
Can an existing CPI program be compared with ACP’s participation model?
Yes. ACP can review non-sensitive portfolio ranges, current workflow, program costs, claims experience, contract structure, and participation terms. The objective is to compare the complete economics and responsibilities—not just one rate or projected payment.
Does contractual CPI participation require capital, and could the dealer owe money after a negative period?
The signed participation agreement controls. ACP’s published participation concept does not require the dealer to form and separately capitalize a dealer-owned reinsurance company, but that statement does not answer every possible financial obligation. Before enrolling, the dealer should identify any deposit, holdback, reserve contribution, deficit, repayment, indemnity, chargeback, or other obligation in the actual agreement. A dealer should not assume that a negative result is automatically limited to zero unless the agreement says so.
What happens to negative periods or losses—do they carry forward?
The agreement must state the treatment. A negative period may reduce later positive results, remain in a cumulative account, be absorbed by another program party, trigger additional reserves, or receive different treatment under the approved structure. The dealer should confirm the calculation period, whether deficits carry forward, how long they remain, whether reserve releases can offset them, and whether they can create any direct payment obligation.
Who holds the program funds and who calculates and distributes a dealer payment?
The approved program documents should identify the legal entity that receives and holds each amount, maintains the accounting, establishes or reports reserves, calculates net results, authorizes a distribution, and sends any payment. A dealer should not assume that Auto Capital Protection, the carrier, the administrator, or another party performs a particular custody or payment function unless the signed agreements assign that role.
What happens to reserves, claims, and undistributed results if the dealer terminates the program?
Termination treatment is agreement-controlled. The documents should address notice, effective date, run-off coverage, open and late-reported claims, reserve development and release, corrections, chargebacks, records, final reconciliation, positive or negative balances, distribution eligibility, payment timing, and any obligations that survive termination. Leaving the program does not necessarily produce an immediate final distribution.
Is there a minimum portfolio size or monthly volume for CPI profit participation?
Eligibility and volume thresholds are program-specific, and this page does not publish a universal minimum. The dealer should obtain the written eligibility standard and confirm whether active accounts, monthly originations, states, data quality, loss experience, placement volume, participation calculation, or distribution thresholds affect qualification or continued eligibility.
Primary-source reading
Verify the product, economics, and ownership structure separately.
These sources provide context for the underlying CPI category, consumer-account controls, and the need for independent review of dealer-owned insurance structures. They do not establish ACP-specific participation terms. The signed policy, program agreement, participation agreement, accounting reports, and applicable law control.
Published by Auto Capital Protection · Substantively updated July 17, 2026 · Review standard: participation projections and agreements should receive appropriate insurance, legal, tax, accounting, and consumer-finance review before a dealer commits · Read our editorial and citation policy
NAIC Creditor-Placed Insurance Model ActModel framework for the underlying creditor-placed insurance product, including roles, evidence, claims, refunds, and compensation controls.↗CFPB Supervisory Highlights, Issue 28Federal supervisory findings showing why ancillary-product administration, cancellations, refunds, and account accuracy require oversight.↗IRS: Micro-captive insurance guidanceFederal tax guidance illustrating why dealer-owned captive or reinsurance structures require independent, qualified tax and legal review.↗
Protect. Strengthen. Participate.
See if your dealership qualifies for CPI profit participation.
Share non-sensitive portfolio ranges, current CPI approach, operating states, and participation goals. An ACP decision-maker will help compare the contractual participation path with dealer-owned reinsurance.