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Member, Beacon International Group, Ltd.
NASHVILLE, Tenn.—The Tennessee House and Senate have passed a measure rewriting the state’s existing captive insurance law and replacing it with one that, among other things, would allow the formation of protected cell captives, branch captives and special-purpose financial captives.
Gov. Bill Haslam is expected to sign the measure H.B. 2007 into law.
The bill the Legislature approved Saturday also would allow captives to provide workers compensation insurance to employers, and affiliates who otherwise qualify as self-insureds, and to write excess or stop-loss workers comp coverage for employers not qualifying as self-insureds.
The workers comp provision should prove attractive to large employers able to qualify as self-insureds in Tennessee, said Gary Osborne, president of Montpelier, Vt.-based USA Risk Group Inc. “You no longer need a front of any kind,” Mr. Osborne said. “It really does take workers comp into your own hands.”
Staff additions planned
The bill provides that premium taxes paid by Tennessee captive insurance companies would be devoted to administering captive regulation in the state.
Julie McPeak, commissioner of the Tennessee Department of Commerce and Insurance, has indicated that she intends to add staff dedicated to captive insurance regulation, Mr. Osborne said.
Tennessee initially passed a captive law in 1978, following Colorado as the second U.S. state to allow captive formations.
But as captives faded as a priority for the state, Tennessee lost ground to other U.S. domiciles such as Vermont and, after reaching a peak of 16 captives in 1990, saw the domicile gradually wither to just four captives at the end of 2010.
NASHVILLE, Tenn.—State officials and others are working to boost Tennessee's appeal as a captive insurance company domicile.