Tennessee Reports 37% Growth in Captive Insurance Industry

The Tennessee Department of Commerce & Insurance (TDCI) announced that 57 new captive insurance companies domiciled in the state in 2015 – a 37 percent increase over 2014. The new captives are comprised of 47 pure captives, four risk retention groups (RRGs), and six protected cell captives (containing 106 protected cells).

The 57 captives also include seven “redomestications” – a term used when an existing captive moves from one captive domicile to another. This is the largest group of redomesticated captives to occur since Tennessee’s captive insurance laws were revamped in 2011, according to TDCI. The redomestications came from Delaware, Montana, Nevada, South Carolina, South Dakota, Vermont, and St. Kitts in the Caribbean.

As of Dec. 31, Tennessee had a total of 126 captives overall. Including cell companies, Tennessee closed calendar year 2015 with 430 cumulative risk bearing entities (RBEs), a 58 percent increase over cumulative calendar year 2014.

Four years ago, Tennessee only had two captive insurance companies.

TDCI’s Insurance Division is responsible for properly regulating Tennessee’s captive insurance industry. In 2011, Gov. Bill Haslam signed the revised State of Tennessee’s Captive Statute, which made the state’s existing captive insurance laws more effective, balanced, and flexible.

TDCI said the captive insurance industry has created numerous jobs and invested assets in the state, including an estimated $2.6 million in revenues projected to be generated in Fiscal Year 2016.