Steps To Form a Captive

Generally, the process of incorporating a captive insurer in Tennessee and applying for a license from the Department of Commerce & Insurance will involve the following steps:

1. Call or E-mail the Tennessee Department of Commerce and Insurance to arrange a meeting with the Director of Captive Insurance and staff to discuss the proposed captive and obtain initial reactions from the Department. An outline of the business plan and a flow chart describing the risks are suggested.
2. Prepare documents necessary for incorporation. The services of a local lawyer may be desirable.
3. Prepare documents necessary for application to the Department
   (See captive application for a list of these items.)
4. Submit three copies of all materials in numbers (2) and (3) above to the Commissioner of Commerce & Insurance for review. Include a $675.00 application fee (additional fees may be required pursuant to the statute).
5. One additional copy of the application material may be assigned to an outside review firm if deemed necessary by the Commissioner.
6. Present the documents in number (2) above to the Secretary of State's office along with Commisssioner's letter of approval and appropriate fees in order to incorporate the captive.
7. After the incorporation, apply to the Commissioner for a Certificate of Authority.

For further information regarding the captive formation process, please refer to the Tennessee Code Annotated, Title 56, Chapter 13.

Other requirements:

1. Select a Tennessee approved Actuarial, CPA or management firm (Click here to see list of approved firms)
2. Have your actuary complete the necessary form for authorization to render its opinion on reserves.
3. Have your CPA complete the necessary form for authorization to perform audits.
4. Have your management firm complete the necessary form for approval as a management firm.
5. An organizational exam may be performed by the Department as soon as possible after you receive the Certificate of Authority and have capitalized the captive. The cost of this exam will be borne by the applicant.