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.
Tennessee Captive Insurance Association celebrates the announcement of International Paper’s captive insurance company relocation to Tennessee, becoming the state’s 700th risk bearing entity (RBE). The Memphis-based global packaging, pulp and paper products company has worked with the state for the past six years and expressed excitement at celebrating this milestone with Tennessee.
“This is very exciting news for Tennessee, and it represents the culmination of years of effort by the Tennessee General Assembly, the Department of Commerce and Insurance and the members of the captive insurance industry in Tennessee all working together in a productive public/private partnership. The captive market is as strong as ever in Tennessee and TCIA looks forward to many more captives being formed in Tennessee in the coming years,” said Tennessee Captive Insurance Association President Kevin Doherty.
The arrival of International Paper’s captive insurance company is a milestone for Tennessee as it represents the Volunteer State’s 700th risk bearing captive insurance entity. Tennessee now has 211 standalone captives and 489 cell captives. Tennessee is currently ranked as the 7th largest captive domicile in the United States and 12th largest domicile in the world. “International Paper’s relocation of its captive insurance company is the latest in a string of accomplishments for TDCI’s Captive Insurance Section and proof that Tennessee has the right mix of leadership and regulation to attract globally recognized brands,” said TDCI Captive Insurance Section Director Belinda Fortman. “Tennessee has proven that our business friendly environment combined with a stable and predictable regulatory environment make us the ‘gold standard’ of the South.”
Captive insurance companies have found a receptive home in Tennessee for decades. Tennessee was one of the first states to adopt captive legislation in 1978. After its leaders modernized the state’s captive rules in 2011, Tennessee emerged as a first choice for companies looking to create a captive insurance company. Tennessee is known for its active TCIA membership, a deep bench of full-time professional captive service providers and flexible, responsive regulators who serve the needs of Tennessee’s captive companies.
“The creation of the 700th risk bearing entity is an event that we proudly share with Governor Lee’s team and the entire State of Tennessee,” said TDCI Commissioner Carter Lawrence. “Governor Lee’s leadership has helped attract new captive insurance companies to Tennessee while Tennesseans make the Volunteer State a place where businesses want to start a captive insurance company or relocate their existing captive insurance company from other states and from countries around the world.”
Tennessee captives have written over $6.4 billion in premium and collected over $16 million in taxes and fees. The captive insurance sector has an estimated economic impact in Tennessee of $31 million in direct annual spending and employs more than 100 full-time professionals.“I commend International Paper for choosing to relocate their captive insurance company to Tennessee and reaﬃrming their commitment to their global headquarters’ home state,” said Governor Lee. “Tennessee remains committed to ensuring a business friendly and commonsense regulatory environment.”
TDCI and International Paper leaders recently celebrated the relocation during a brief socially distanced event in Nashville. The event was highlighted by a video message from Tennessee Governor Bill Lee and the presentation of a ceremonial license by TDCI Captive Insurance Section Director Belinda Fortman to David Arick, International Paper Assistant Treasurer, Global Risk Management and board member of RIMS, the risk management society.
About the Tennessee Captive Insurance Association (TCIA):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.
The Tennessee Captive Insurance Association (TCIA) welcomes Carter Lawrence as the newly appointed Commissioner of the Tennessee Department of Commerce & Insurance (TDCI) announced today by Tennessee Governor Bill Lee.
“The captive industry is very pleased with the appointment of Carter Lawrence as Commissioner of the Tennessee Department of Commerce and Insurance by Governor Lee. TCIA has worked with him extensively in the past on captive insurance matters. I believe he will do an excellent job and is well qualified to lead the TDCI at this time. We look forward to working with Commissioner Lawrence,”- TCIA president Kevin Doherty.
Lawrence brings valuable expertise to the role having served as Chief Deputy Commissioner and Chief Operating Officer at the Department of Commerce & Insurance. He has also served on Tennessee’s Economic Recovery Group throughout the COVID-19 pandemic, assisting Governor Lee’s efforts to reboot the state’s economy.
Belinda Fortman, TDCI Captive Director said,“we in the captive division are thrilled to have Carter Lawrence promoted as the new TDCI Commissioner. Carter has been very supportive of captive insurance development in Tennessee. We look forward to his ongoing support for the captive industry and his continued leadership for our domicile.”
Michael Corbett, Tennessee’s former chief regulator and TCIA Board Member added, “The TCIA board of directors wishes to congratulate Carter Lawrence as the new TDCI Commissioner. Commissioner Lawrence has been a long-time supporter of captive insurance and his appointment will insure that Tennessee’s growth as a first tier domicile for the formation of captive insurance companies will continue to expand. As Tennessee nears the formation of its 700th Risk Bearing Entity (RBEs), strong support and leadership will be required for the next 700. The TCIA is confident that Commissioner Lawrence brings all of these attributes to the table.”
A lifelong Tennessean and Nashville native, Lawrence earned his Doctor of Jurisprudence and a Master of Business Administration at the University of Tennessee, Knoxville. Prior, he graduated from Wheaton College in Illinois. He currently resides in Nashville with his wife and three children and is a member of Nashville’s Church of the Redeemer.
“Carter is a proven public servant who has stewarded key priorities for the administration throughout his tenure and I’m confident he’ll continue to support Tennessee businesses and consumers with integrity,” said Governor Lee. “We appreciate his dedication to the Department of Commerce & Insurance and look forward to his continued service.”
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. Tennessee continues to grow in 2020 as a top tier domicile for captives with close to 700 risk-bearing entities (RBEs), compared to 652 at the end of 2019. Visit www.tncaptives.org for TCIA information and news. Follow #TCIA on Facebook, Twitter and Linkedin.
Tennessee Captives 2020: Domicile Facts, Figures and Milestones
Tennessee experienced exceptional captive insurance growth in 2020.
Continued growth in the captive industry remains a priority for TCIA who are working in partnership with Governor Lee, Commissioner Lawrence and the TDCI team to ensure a bright future for our domicile. Tennessee has emerged as a first choice for captives worldwide and the state has become known for its deep bench of knowledgeable and responsive professionals who serve the industry.
2020 Tennessee Captive Dashboard•720 Risk Bearing Entities: 212 Captives, 508 Cells•64% increase from 2019: 18 newly licensed captives, 41 new cells2020
Domicile and Captive Market Changes•Increased interest in captives for property & liability coverages•Increased interest from Tennessee owners looking to re-domesticate offshore captives and move their captives “home”
COVID19 Pandemic Impact•Pre-pandemic, TDCI had already transitioned to being fully electronic resulting in a seamless transition and no customer service impacts•Electronic document notary and virtual annual meetings were approved in response to remote work environments•Heightened “risk awareness” across many industries•Additional coverages added to operational captive programs to address gaps
2021 Tennessee Captive Outlook•New captives and cells already formed or underway•Continued growth due to the challenges of increasing traditional market rates, gaps in commercial coverage and businesses looking for more efficient means to finance risk•Net captive growth expected to continue with similar trend to 2020
TCIA welcomes Joshua Clark as the newly appointed Director of Business Development for the Tennessee Department of Commerce & Insurance (TDCI).
“We are very excited to welcome Josh to the Tennessee captive industry,” said TCIA president Kevin Doherty. “We look forward to working with him and the Tennessee Department of Commerce and Insurance to develop captive opportunities that will be productive for our State. The TCIA pledges to work closely with Josh to further our public/private partnership and to help ensure that Tennessee remains among the short list of preferred domestic domiciles for captives. ”
Clark is an insurance industry veteran with diverse experience. He most recently served as a consultant for EXL Loss Control. Clark’s expansive experience across the insurance industry equips him with valuable expertise and industry knowledge. He will bring his background of building, leading and enabling high performing teams while crafting and implementing successful strategies to drive productivity and strengthen relationships on behalf of Tennessee.
“I am incredibly honored to join TDCI as the new Director of Business Development for the Insurance Division,” said Josh Clark. “The TDCI Captive Section, led by industry veteran Belinda Fortman, is uniquely positioned to continue its reputation as a top tier global domicile of choice for businesses and I look forward to promoting our values of expertise, customer service and innovation within the captives space ”Tennessee continues to grow as a top tier domicile for captives with over 205licensed captive insurance companies and 471 approved cell companies for a total of 674 risk-bearing entities (RBEs), compared to 652 at the end of 2019.
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