DEPARTMENT OF COMMERCE & INSURANCE CAPTIVE INSURANCE SECTION · DEPARTMENT OF COMMERCE & INSURANCE...
Transcript of DEPARTMENT OF COMMERCE & INSURANCE CAPTIVE INSURANCE SECTION · DEPARTMENT OF COMMERCE & INSURANCE...
STATE OF TENNESSEEDEPARTMENT OF COMMERCE & INSURANCE
CAPTIVE INSURANCE SECTION
TICUA
CFO and HR Staff Retreat
Nashville, Tennessee
November 30, 2015
A captive insurer is generally defined as:
• An insurance company that is wholly owned
and controlled by its insureds; • Its primary purpose is to insure the risks of its
owners, and
• Its insureds benefit from the captive insurer’s
underwriting profits
Captive Insurance
Captive Insurance is utilized by insureds
that choose to:
• Put their own capital at risk by creating their
own insurance company,
• Work outside of the commercial insurance
marketplace, and
• Achieve their risk financing objectives.
Captive Insurance
Captive Insurance
Captive Insureds Put Their Own Capital
at Risk:
• Any insured who purchases captive
insurance must be willing and able to
invest its own resources.
• The insured in a captive insurance
company not only has ownership in and
control of the company but also benefits
from its profitability.
Captive Insurance
Working Outside the Commercial
Insurance Marketplace:
• Insureds in a captive choose to put their
own capital at risk by working outside of
the traditionally regulated commercial
insurance marketplace.
• The traditional insurance regulatory
environment tries to “protect” the insured
from the insurer.
Captive Insurance
To Achieve Risk Financing Objectives:
• The main reasons why organizations wish to
better control their risk management
programs are excessive pricing, limited
capacity, coverage that is unavailable in the
"traditional" insurance market, or the desire
for a more cost efficient risk financing
mechanism. Other reasons include: • Broader coverage,
• Stability in pricing and availability,
• Improved cash flow, and
• Increased control over the program.
Captive Insurance
Tennessee is the second-oldest US captive domicile, having first passed a captive law in 1978.
Tennessee Governor Bill Haslam updated the regulatory framework, contained in the Revised Tennessee Captive Insurance Act. This new Act became effective on September 1, 2011.
Changes in the new Act put Tennessee on the leading edge of captive regulations in the United States.
RECOMMENDATIONS
Recommendation 1: Dedicate a Captive
Insurance Section within the Insurance Division
with the goal of establishing Tennessee as a viable
captive domicile to promote investment and job
creation in the state.
Regulatory Team
Julie Mix McPeak – Insurance Commissioner
Michael Humphreys – Assistant Commissioner
Michael A. Corbett – Director – Captive Section
Tony Greer – Chief Counsel for Insurance
Ben Whitehouse – Assistant General Counsel
Jennifer Stalvey – Insurance Examiner
Cathy Thomas – Insurance Examiner
Kurt Polasko – Insurance Examiner
Kira Burnett – Administrative Secretary
Of the existing and in process captives,
there is a wide variety of types:Medical Stop Loss
Liability
Credit
Medical Malpractice
Property
Workers Compensation
These captives include:Newly created captives
Expansion of existing captives
Re-Domestication of existing domestic and
foreign captives
Profiles
In the rearview mirror
12/31/13
28 Risk Bearing Entities
20 Captive Companies
8 Cell Companies
9/1/15
312 Risk Bearing Entities
86 Captive Companies
226 Cell Companies
Globally Competitive Market
• International
• Bermuda
• Cayman
• Gibraltar
• Guernsey
• Luxembourg
• Malta
• Hong Kong
• Domestic
• Tennessee
• Connecticut
• Delaware
• Missouri
• South Carolina
• Vermont
• Utah
Tennessee Advantages
Up to date statute
Well trained staff (all ACI Department)
Regulate to yes.
Central location
Strong support from Executive Branch,
Legislature and Business Community.
But…the strongest compelling
reason…?
Strength of Tennessee
2nd Day of Spring – Burlington, VT
STATE OF TENNESSEEDEPARTMENT OF COMMERCE & INSURANCE
CAPTIVE INSURANCE SECTION
TICUA
CFO and HR Staff Retreat
Nashville, Tennessee
November 30, 2015