Nashville, TN – Newly approved captive insurance legislation further modernizes and enhances Tennessee’s reputation as the go-to domicile in the captive insurance industry.
Approved by the General Assembly earlier this year, the 2016 legislation represents the third update to the Revised Tennessee Captive Insurance Act of 2011, which first allowed the captive insurance industry to flourish in Tennessee.
The Tennessee Department of Commerce and Insurance (TDCI)’s Captive Insurance Section is responsible for regulating the state’s captive insurance industry. A captive insurance company represents an option for many corporations and groups that want to take financial control and manage risks by underwriting their own insurance rather than paying premiums to third-party insurers
“The captive insurance industry operates in a competitive, fast-moving environment that demands competitors keep pace or be left behind,” said Captive Insurance Section Director Michael Corbett. “Tennessee must be nimble and forward-looking if we are going to surpass the goals we’ve established and continue our unprecedented growth. I’m grateful for the foresight that Governor Bill Haslam and Commissioner Julie Mix McPeak have shown by supporting these changes in the legislation.”
The provisions in the 2016 legislation now make it easier for companies wishing to redomesticate to Tennessee to utilize a seamless procedure effectively transferring the entity directly from the old domicile into Tennessee by registering with the Secretary of State’s Office once the captive has been approved by the Department. Further, captives redomesticating from offshore to Tennessee are now eligible to forego paying premium taxes in either the first or second year of their operation, provided they commit to staying in operation for five years or pay back the foregone premium tax with interest.
Changes to the protected cell law make Tennessee the strongest domicile in the world for the operation of cell companies. These changes give captive owners the strongest protections available in the industry to ensure that the assets of individual cells are isolated from any other cell owner. Other revisions include self-procurement tax forgiveness and setting a uniform due date of March 15 for annual reports and payment of premium taxes.
“With this legislation in place, if you are a Tennessee business there is now no reason to have your captive based anywhere else,” said Tennessee Captive Insurance Association President (TCIA) Kevin Doherty.
The 2016 captive legislation drew support from longtime leaders in both houses of the Tennessee General Assembly including Senate First Vice Chairman of the Senate Judiciary Committee Sen. Doug Overbey (R-Maryville), House Majority Caucus Chairman from District 63 Rep. Glen Casada (R-Williamson County) and District 14 Rep. Jason Zachary (R-Knox County).
The legislation was recently signed into law by Tennessee Governor Bill Haslam.
