Tennessee sets up captive insurer
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The state of Tennessee has established a captive insurer to help it insure unique and difficult risks and reduce its overall insurance costs, the Tennessee Department of Treasury said Monday.
Formation of The Tennessee Captive Insurance Co. follows legislation enacted by the Tennessee General Assembly last year permitting the state treasurer to set up a captive with approval of the state’s board of claims.
The state captive will initially issue property and cyber liability policies only but may add other lines of coverage in future. The captive is regulated by the Tennessee Department of Commerce and Insurance.
Tennessee self-insures its property and general liability risks, which covers all state-owned buildings and contents, including the campuses of higher education institutions in the state, with total property value of $31.4 billion as of July.
The use of a captive will help the state lower its insurance costs and better evaluate and control state government risks, the Tennessee Department of Treasury said in a statement.
Tennessee ranked as the eighth-largest U.S. captive domicile, with 153 captives licensed in 2021, based on the latest Business Insurance ranking.
