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Captives
Tennessee Cuts Capital Requirements for Protected Cell Captives

The amendments also will allow captives to write parametric coverage.
  • Timothy Darragh
  • August 2021
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SEAT OF POWER: The Tennessee Capitol sits on a hill in Nashville. Gov. Bill Lee recently signed a bill amending the state’s captive insurance law.

SEAT OF POWER: The Tennessee Capitol sits on a hill in Nashville. Gov. Bill Lee recently signed a bill amending the state’s captive insurance law.

Recent updates to Tennessee's captive insurance statute reduce capital requirements for starting protected cell captives, among various amendments signed into law by Gov. Bill Lee.

The bill Lee signed, H.B. 767, reduces the statutory capital needed by protected cell captive insurers to commence operations from $250,000 to $100,000, according to the amended law.

“By reducing the minimum capital and surplus needed to start protected cell captive insurance companies, Tennessee is sending a strong message that we value companies' freedom to invest their money to obtain the highest return on investment possible rather than allocate money in excess of what is needed to support the potential risk of insurance losses in their captive,” said Belinda Fortman, Tennessee Department of Commerce and Insurance Captive Sector director.

In a statement with the TDCI, Tennessee Captive Insurance Association President Kevin Doherty endorsed the amendments. “The TCIA supports the reduction in the minimum capital for protected cell captives to $100,000 and believes this will help to spur significant growth in cell captives in Tennessee,” he said.

In addition, the amendments will allow captives to write parametric coverage.

Doherty said the amendment would allow captives to offer parametric insurance in innovative ways to cover large numbers of insureds in natural disasters or other similar events.

Risk retention groups would not be allowed to write parametric coverage, according to the amendment.

Tennessee's captive insurance premium volume topped $1.6 billion and the number of active captives increased to 146, the statement said. The state now is home to more than 750 risk-bearing entities, it said.

The wide-ranging insurance bill also expands the list of conditions that allow companies credit for reinsurance.

Best’s Rankings

Largest 30 Risk Retention Groups 2020 Ranked by Gross Premiums Written

(US$ thousands)

Rank AMB # Company State of Domicile Gross Premiums Written
1 012014 MCIC Vermont (A RRRG) Vermont 442,714
2 010768 United Educators Ins, a Reciprocal RRG Vermont 291,826
3 014013 MedPro RRG Risk Retention Group District Of Columbia 157,706
4 012419 Alliance of Nonprofits for Ins RRG, Inc. Vermont 87,591
5 011256 ICI Mutual Insurance Company, a RRG Vermont 78,885
6 076155 Applied Medico-Legal Solutions RRG, Inc. Arizona 76,070
7 010010 American Contractors Insurance Co RRG Texas 71,045
8 076172 Health Care Industry Liab Recip Ins RRG District Of Columbia 63,600
9 010718 OMS National Insurance Company, RRG Illinois 61,307
10 014310 Coverys RRG, Inc. District Of Columbia 54,102
11 012165 Franklin Casualty Insurance Co RRG Vermont 52,286
12 010844 Ophthalmic Mutual Insurance Co (A RRG) Vermont 50,368
13 075375 Titan Insurance Company, Inc., A RRG South Carolina 45,303
14 071152 Caring Communities, a Reciprocal RRG District Of Columbia 43,160
15 071190 Healthcare Underwriting Company, a RRG Vermont 41,424
16 075520 Comm Hosp Alt for Risk Transfer (A RRRG) Vermont 41,047
17 010741 Housing Authority RRG, Inc. Vermont 41,040
18 023408 Graph Insurance Group, a RRG, LLC Vermont 38,191
19 022026 Lone Star Alliance, Inc., RRG District Of Columbia 37,566
20 011056 Preferred Physicians Med RRG, Mut Ins Co Missouri 33,258
21 076514 Geisinger Insurance Corporation, RRG Vermont 31,644
22 013801 Preferred Contractors Ins Co RRG LLC Montana 31,572
23 012270 American Excess Insurance Exch RRG Vermont 30,625
24 011608 National Catholic RRG, Inc. Vermont 29,971
25 011230 California Healthcare Ins Co, Inc. A RRG Hawaii 29,196
26 075714 American Trucking & Transp Ins Co, a RRG Montana 27,818
27 023017 National Transportation Ins Co RRG, LLC Montana 24,209
28 076441 Allegiant Insurance Company, Inc., A RRG Hawaii 24,200
29 014194 Broadline RRG Inc Vermont 23,028
30 071155 New York Healthcare Ins Co, Inc., A RRG District Of Columbia 22,592

Source: BestLink logo


Timothy Darragh is an associate editor. He can be reached at timothy.darragh@ambest.com.


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