Article

Tennessee has established itself as a leading captive insurance domicile in the United States, offering a favorable regulatory environment and numerous advantages for businesses looking to form captive insurance companies.

Key Features and Growth

• Tennessee significantly modernized its captive insurance statute in 2011, leading to a "rebirth" of the captive industry in the state.
• Currently, Tennessee is the 9th largest captive domicile in the US and the 13th largest in the world.
• The state allows for virtually all captive licensing types, including single-parent captives, group captives, risk retention groups, sponsored captives, branch captives, and special purpose captives.

Regulatory Environment

• The Tennessee Department of Commerce & Insurance's Captive Insurance Section oversees the industry, providing focused and experienced regulation.
• The regulatory team is known for its service-oriented professionals and commitment to customer service.
• The state regularly reviews and updates its captive statutes to remain competitive and provide balanced regulation.

Recent Developments

• Tennessee recently licensed its 1000th risk-bearing entity, demonstrating significant growth in the sector.
• In 2022, Tennessee established its own captive insurance company to manage state property and cyber risks.
• Recent legislation in 2024 has further modernized the state's captive insurance laws, addressing issues such as examinations, board meeting requirements, and agency captives.

Economic Impact

• Tennessee captives paid $2.4 billion in premiums in 2022, indicating the substantial economic impact of the industry.
• The state has seen consistent growth in new captives, risk-bearing entities, and premium collection.

The TCIA plays a crucial role in supporting and advancing the captive insurance industry in Tennessee.

Active Captive Association

• Tennessee Captive Insurance Association (TCIA) is a community of captive owners, industry experts, and service providers engaged in advocacy, communication, and education.
• The association has been active since 2011, coinciding with the modernization of Tennessee's captive insurance laws.

Activities and Partnerships

• TCIA works closely with the Tennessee Department of Commerce & Insurance, reviewing state statutes annually to determine if updates are needed.
• The association is actively involved in proposing and supporting legislation to improve the captive insurance environment in Tennessee.
• In 2024, TCIA successfully ran a bill that updated statutes related to examinations, in-person board meeting requirements, and other aspects of captive regulation.

• TCIA has played a significant role in Tennessee's growth as a captive domicile, contributing to its current ranking as the 9th largest captive domicile in the US.

Advantages for Captives in Tennessee

• Central Location: Tennessee's geographic position offers convenience for businesses across the US.
• Infrastructure: The state provides access to a network of captive managers, attorneys, accountants, and actuaries.
• Business-Friendly Environment: Tennessee is known for its pro-business climate and focus on keeping taxes low.

Tennessee's commitment to fostering a thriving captive insurance industry, combined with its modern legislation, experienced regulatory team, and the support of the TCIA, has positioned it as an attractive domicile for companies seeking to establish or relocate their captive insurance operations.

Forming a new captive or looking to redomesticate an existing insurance company?  Contact us today for more info on the pros and cons of having your captive insurance company call Tennessee “home”.