Tennessee-domiciled captive insurance companies exceeded $1 billion in written premiums in 2017 for the first time, according to year-end figures from the Department of Commerce and Insurance (TDCI).
The figures also showed that the TDCI approved 52 new risk-bearing entities last year, compared to the 104 in 2016.
The 52 licenses approved consisted of nine pure captives, four protected cell captives, and 39 cell companies.
As of 31 December 2017, Tennessee had a total of 591 captive insurance companies, a nine percent increase on 2016.
The state’s captive industry has grown in both company size and licensees every year since the introduction of new legislation that revamped Tennessee's regulation of captive companies in 2011.
As of 21 December, three new rules were implemented to modernise captive insurance in Tennessee and set the Volunteer State apart from other US domiciles.
The new rules will allow protected cells to go dormant and later to be restarted; new captives and cell companies will no longer be required to be audited if they were formed in the last quarter of a year and finally, a full financial exam will not be required where specific limited questions have arisen about the operation of a captive company.
Director of captive insurance Michael Corbett commented: “Not only are the size of new captives increasing, we are seeing the maturation of the captive insurance marketplace.Captive owners are discovering better ways to manage risk through their existing program and are putting more risk, and therefore more premiums, into their captives.”
Julie Mix McPeak, TDCI Commissioner, added: “Tennessee’s reputation as a business friendly state has helped us become one of the first states now mentioned when corporations discuss where to establish a captive insurance company.”