Tennessee Department of Commerce and Insurance
Carter Lawrence, commissioner of the Tennessee Department of Commerce and Insurance, talks to John Savage about attracting and retaining captive insurance companies in Tennessee
Congratulations on the recent licensing of the 1000th risk-bearing entity by the TDCI’s Captive Insurance Section. What does this milestone signify for the captive insurance market in Tennessee?
We’re very proud of hitting that important milestone. The 1000th risk bearing entity milestone indicates our success and the growth we have experienced in the last 12 years.
It shows the captive insurance world that Tennessee’s captive insurance model is thriving.
It’s proof that Tennessee has had and continues to have real traction among companies who are continuing to explore their best options for risk management. It also shows that many companies are specifically thinking about captive insurance as an option.
Tennessee is one of the oldest domiciles for captives in the US. However, it wasn’t until our captive insurance statute was modernised in 2011 that there was a ‘rebirth’ of the captive insurance market in the state.
Once our statute was modernised, it took the hard work and leadership of our governors — both past and present — to make our captive insurance industry as successful as it is now.
We must also thank the leaders in our legislative body and the General Assembly.
Could you provide an overview of the current state of the captive insurance market in Tennessee and its importance to the state’s economy? In addition, what key factors have contributed to Tennessee’s position as the ninth largest captive domicile in the US?
The state is also the 13th largest domicile in the world, according to Allianz’s global 2022 rankings. To put that in perspective, Tennessee businesses paid a total of US$2.4 billion in premiums in 2022.
We have an award-winning, highly-trained captive insurance team that is laser-focused on customer service. Our insurance department is dedicated to serving all risk management needs and all types of captives.
Tennessee’s legislation for captives is state-of-the-art — we remain committed to working with the industry to improve our legislature and to build upon what already works for our statutory construction.
The leadership from our governor, the Tennessee General Assembly and our legislative body are key facets to our success.
All those factors have afforded us the success that we’ve experienced.In addition, we’ve been very intentional about our marketing of Tennessee. Michael Schultz is the Tennessee Department of Commerce & Insurance business development director, a newly created role.
He is broadly responsible for marketing Tennessee’s risk management capabilities with a specific focus on captives. He has been appointed in an effort to make sure that we don’t overlook local growth that we could have in Tennessee.
We recognise that Tennessee has developed enough as a captive domicile to be able to provide the complex regulation that the state needs.
We were really proud that the International Paper Co. moved its captive insurance company to Tennessee from Vermont.
It recognised that Tennessee had developed enough as a captive domicile to be able to provide the complex regulation that they needed.
And I think IP is just the start of continued redomestications on the horizon that we are really excited about.
Tennessee has grown in population and we’ve grown in companies, and we want to make sure that that growth happens in Tennessee as well.
In what ways does the TDCI’s Captive Insurance Section contribute to the overall success and effective regulation of Tennessee’s captive insurance industry?
As the regulator, we hope we are doing a good job of fostering success and providing effective regulation. Tennessee consistently works to allow captives to be able to build on their capital of success, while maintaining a reasonable, sensible regulatory environment that does not hinder that ability. We are continuously evaluating our rules and our statutes to keep up-to-date with the industry, while at the same time not sacrificing the robust regulatory structure that we must maintain.
Could you share any initiatives or programmes aimed at attracting and retaining captive insurance companies in Tennessee, as well as any that ensure a favourable business environment?
We always invest in our people to better serve our customers. Most of our team come to us as CPAs, but if they don’t have captive experience when they start, we give them the chance to obtain the relevant designation. For example, the Associate in Captive Insurance designation allows them to further their captive insurance education. They work closely with senior members of the department’s captive leadership, the captive managers and also the owners to decide what options best suit the client that they might be assigned to.
Our HR department also carried out a total compensation study in which it monitored what state employees earn compared to the private sector. It resulted in the vast majority of our commerce and insurance employees recieving a pay increase. HR’s action increased the total rewards for our team which has helped us with talent retention and recruiting the best possible people to our team.
Additionally, if employees receive designations relevant for their work we have approval from HR to give those employees an increase in salary. That allows someone to begin a role, receive training and get rewarded for the training. It makes our recruitment more attractive and our retention rate increases because the employee can mature their regulatory career with us. If they wish, they can begin and end their career at the state of Tennessee, we certainly want to make that a possibility.
Looking ahead, what is your vision for the future of the captive insurance market in Tennessee, and what steps do you plan to take to further enhance its growth and success?
We want captive insurance to be seen as a component of risk management. Tennessee has taken the relatively unique step of breeding a captive for the management of certain lines of risk and we’ve domiciled in the state — the relationship that we’ve had with the Treasury Department in which the captive is located, has been phenomenal.
They’ve been really pleased with the regulation that we provided.
Our overall vision is to continue to grow captive insurance in Tennessee by providing the highest quality customer care.
We want captive owners and support vendors to have unfettered access to their analysts. In this world of more virtual work, we want our customers to reach out to us so that we can better understand their needs.
We will continue to work with our governor and our General Assembly to make sure that we are well positioned for future growth. I’m sure the support that we’ve enjoyed from the governor will only continue. This will allow us to build a strong captive insurance industry. With the help of our team leaders and legislative staff, we’ll never miss an opportunity to improve upon our existing legislation to ensure greater attraction to Tennessee.
Tennessee has beautiful scenery, a wonderful climate and is world-renowned for its music. It’s an amazing place to live and work.
