Tennessee’s new overhauled captive insurance legislation, signed in June, could change risk management for corporations both within and outside of Tennessee.
Burr & Forman LLP partner Kevin M. Doherty helped draft the legislation which was passed unanimously by both the Tennessee House and Senate in May. Doherty worked closely with Tennessee Commerce and Insurance Commissioner Julie McPeak, a former Burr & Forman attorney, and members of the Tennessee General Assembly to draft the legislation and advocate for its passage.
“This law puts Tennessee at the forefront of the captive insurance industry and will allow companies throughout the country to bring their captive insurance programs to Tennessee and take advantage of our cutting edge law,” said Doherty.
The law, one of the most progressive in the country, allows for the formation of new types of captive insurance companies in the state. It will add incorporated cell captives, branch captives, and special purpose financial captives in addition to the standard single owner, association, industrial insured, and risk retention group captives. Significantly, in addition to standard property and casualty coverages, it now permits the formation of captives to write worker's compensation for entities that qualify as self-insureds, as well as employee benefits and medical stop loss captives. As Doherty notes, this could change risk management for many companies in Tennessee and elsewhere. “The formation of or participation in a captive can be an effective risk management technique for virtually any company,” said Doherty.
Based in the firm’s Nashville office, Doherty is head of the firm’s Insurance Group. He concentrates his practice on insurance regulatory law, with particular emphasis on captives, risk retention groups, self-insurance funds, and other alternative insurance vehicles. Doherty is listed in Best Lawyers in America and has been recognized numerous times as one of the Nashville Business Journal‘s “Best of the Bar.”
