Nashville
25 May 2017
Reporter: Mark Dugdale

Tennessee revises captive law as premiums climb


Captives domiciled in Tennessee can now go dormant and easily move around cells following the passage of new legislation this month, as premiums hit an all time high.

The 2017 legislation, enacted as Public Chapter 354, was signed into law on 12 May, further modernising the Revised Tennessee Captive Insurance Act of 2011.

“Tennessee’s captive laws already make the Volunteer State the strongest domicile in the world for the operation of cell companies,” said Michael Corbett, captive insurance section director at the Tennessee Department of Commerce & Insurance (TDCI).

“This legislation gives Tennessee protected cell captives even greater flexibility in moving cells between captives and spinning off individual cells into standalone captives. This is a significant efficiency for Tennessee companies.”

The legislation also allows captives to develop a process for a captive to exist in a dormant status so managers may procure insurance from the traditional market when advantageous and later return to the captive structure when the market fluctuates.

“This legislation reinforces the Volunteer State’s reputation as one of the nation’s premier captive domiciles,” added Tennessee Captive Insurance Association president Kevin Doherty.

Tennessee hosts 160 captive insurance companies and a total of 545 risk-bearing entities.

For the 2016 tax year, total premium dollars surpassed $1 billion for the first time in the state’s history and a 2016 economic development survey of captive managers attributed more than $650 million in direct and indirect spending in the state to the captive insurance industry.

TDCI commissioner Julie Mix McPeak commented: “Less than 10 years ago, successful Tennessee businesses had to look elsewhere to form a captive insurance company because there wasn’t a place for them here.”

“Today, Tennessee is at the forefront of the industry due in no small part to the leadership of governor Bill Haslam, the strong captive insurance team we have in-house led by director Michael Corbett, and the robust support that we receive from members of the General Assembly.”

More regulation news
The latest news from Captive Insurance Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Central Bank of Malaysia calls for more captive data
21 August 2017 | Kuala Lumpur | Reporter: Mark Dugdale
The paucity of data on captives needs to be addressed as a matter of priority, according to Muhammad bin Ibrahim
Coverage for pre-existing conditions tops healthcare reform concerns
02 August 2017 | Ohio | Reporter: Becky Butcher
Retaining insurance coverage for pre-existing conditions is the most vital feature of successful long-term healthcare reform, according to a survey by KeyBank
OECD releases additional guidance on CbC reporting
21 July 2017 | Brussels | Reporter: Becky Butcher
The Organisation for Economic Co-operation and Development (OECD) has provided further guidance on the implementation of country-by-country (CbC) reporting under its framework on base erosion and profit shifting (BEPS) initiative
UK government sets out new ILS framework
21 July 2017 | London | Reporter: Becky Butcher
The UK Treasury has published new rules for insurance-linked securities (ILS) as the country aims to grab a share of the rapidly growing market
US agrees to sign US-EU covered agreement
18 July 2017 | Washington DC | Reporter: Becky Butcher
The US Department of the Treasury and the Office of the US Trade Representative have revealed their intent to sign the bilateral agreement between the US and EU regarding insurance and reinsurance
UK to implement ILS regime this autumn
27 June 2017 | London | Reporter: Becky Butcher
London’s insurance-linked securities regulation is now being finalised by the UK Government ready for implementation this autumn, according to a letter sent from HM Treasury to the London Market Group’s Nicolas Aubert
Texas governor signs off captive bill updates
19 June 2017 | Austin | Reporter: Becky Butcher
Texas governor Greg Abbott has signed the state’s new captive bill into law