Late last month, the Tennessee legislature passed the “Amended and Restated Tennessee Captive Insurance Act” (HB 2007/SB 1540) (the “Act”) in an effort to increase its attractiveness as a domiciliary state. The Act amends the current law by authorizing the formation of sponsored captive insurance companies (including protected cells), branched captive insurance companies and special purpose financial captives. The minimum unimpaired paid-in capital and surplus will be changed to $250,000 for a pure captive insurance company, $500,000 for an association captive insurance company, $500,000 for an industrial insured captive insurance company, $1 million for a risk retention group, and $500,000 for a sponsored captive insurance company. The annual aggregate premium taxes will be between $5,000 and $100,000. Additionally, any branch captive insurance company, which may, among other things, insure or reinsure certain employee benefits business, is required to maintain its principal place in Tennessee.
The Act has been sent to Governor Bill Haslam for his signature. Click here to view the entire text of the Act.