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Captive rule overhaul: hearing Oct. 20

The Tennessee Department of Commerce & Insurance (TDCI) has proposed a rewrite of Chapter 0780-01-41, the rules that govern Tennessee captives. A public hearing is set for Oct. 20, 2026, at 9:00 a.m. in Conference Room 1-B, 500 James Robertson Parkway, Nashville.

These are the main proposals, all from the hearing notice:

• Reserve opinions: Every captive would file an annual actuarial opinion on its loss reserves. Protected cell companies would also have to identify any cell whose reserves are inadequate or redundant.
• Service provider oversight: Captive managers, MGAs, producers and reinsurance intermediaries would need the commissioner's approval to act for captives. The commissioner could remove them without a hearing, and the captive would then have 30 days to replace them.
• Audits and exams: The exam cycle would stay at three years, with an extension to five for captives that have continuous audited financials. Protected cell companies could leave inactive cells out of the audit report, with limits. Captives writing $500 million or more in premium would need an evaluation of internal controls.
• Virtual annual meetings: Captives that use at least two qualifying service providers could apply to hold their annual meeting virtually.
• Timelines:
  • Changes to the business plan that aren't material must be filed within 30 days.
  • Applications left incomplete for six months would be treated as abandoned.
  • A license could be backdated only if review finishes within 45 days.
• Premium tax: Filings and payments would go through the OPTins system.

Source: TDCI, Notice of Rulemaking Hearing.

Sixth straight year of growth

TDCI reported that 2025 was the sixth year in a row of growth for Tennessee captives. The department licensed 5 new captives and 50 new cells, ending the year with 184 captives and 703 cells. Active cells rose 8% and total risk-bearing entities rose 6%. Premium grew to $4.2 billion from $2.9 billion in 2024.