TCIA Welcomes Captive Legislation Updates
Tennessee’s Captive Insurance public/private partnership continues drawing attention and accolades as Governor Lee announced newly approved modernizations to Tennessee’s Captive Statute. The new updates to Tennessee’s captive insurance statute will help fuel the Volunteer State’s growing reputation as a ﬁrst-choice domicile for companies looking to establish a captive insurance company.
Lee’s latest updates to Tennessee’s captive laws include authorizing parametric insurance coverage and reducing the statutory capital needed by protected cell captive insurers to commence operations from $250,000 to $100,000, amongst other improvements.
“By reducing the minimum capital and surplus needed to start protected cell captive insurance companies, Tennessee is sending a strong message that we value companies’ freedom to invest their money to obtain the highest return on investment possible rather than allocate money in excess of what is needed to support the potential risk of insurance losses in their captive,” said Tennessee Department of commerce & Insurance (TDCI) Captive Insurance Section Director, Belinda Fortman. “By modernizing Tennessee’s captive insurance statute to reduce the minimum coverage for protected cell captive insurers as well as including parametric insurance coverage for the ﬁrst time, the Volunteer State is providing strong incentives for captive owners to choose Tennessee as their captive domicile.”
Tennessee Captive Insurance Association (TCIA) President Kevin Doherty said: “The TCIA is grateful that the Department and the General Assembly, two of the three legs of the proverbial three-legged stool, have continued to support important updates like this to the captive law that help Tennessee remain at the forefront of our industry. Speciﬁcally, the TCIA supports the reduction in the minimum capital for protected cell captives to $100,000 and believes this will help to spur signiﬁcant growth in cell captives in Tennessee. The TCIA also believes it is signiﬁcant that Tennessee is leading the way now in permitting captives to oﬀer parametric insurance that can oﬀer innovative ways to cover large numbers of insureds in natural disasters or other similar events. As the third leg of the stool, the TCIA looks forward to continuing to work with the other two legs of this public private partnership to maintain Tennessee’s prominence as a captive insurance domicile.”
Years of teamwork amongst Tennessee’s deep bench of captive insurance professionals, including a very active TCIA membership, are credited for the domicile’s role as a first choice option for corporations and groups wanting to take financial control and manage business risk by forming their own insurance company.
2020 was another record-setting year for Tennessee’s captives as captive premium volume topped $1.6 billion and the number of active captives in Tennessee increased to 146. Today, over 750 risk-bearing entities call Tennessee home. Additionally, Tennessee’s team of captive professionals have drawn international accolades with representatives from both TCIA and TDCI recently named to Captive Review magazine’s “Power 50” list.
“Power 50” member Fortman said: “Through the ﬁrst ﬁve months of 2021,Tennessee has averaged 10 new captive formations a month, which is an impressive pace that we hope to see continue. The growth of the captive insurance industry in Tennessee that we are seeing today is a byproduct of years of focused teamwork and the far-reaching vision of Tennessee’s leaders. I am thankful for the hard work and support of Governor Lee, the members of the Tennessee General Assembly and the captive insurance stakeholders who are helping make Tennessee truly the ‘Gold Standard’ of the South.”
The Tennessee Captive Insurance Association (TCIA) is a community of captive industry experts, owners and service providers engaged in advocacy, communication and education, committed to a strong captive insurance industry in Tennessee since 2011. Visit www.tncaptives.org for TCIA information and news. Follow #TCIA on Facebook, Twitter and Linkedin.