Tennessee Department of Commerce & Insurance Captive Insurance - - PowerPoint PPT Presentation

Tennessee Captive Insurance Association December 7, 2011

Tennessee Department

• f Commerce & Insurance

Captive Insurance Department

TDCI’s Focus

Two primary objectives:

• 1. Monitoring the solvency and

standards of captive insurance companies.

• 2. Ensuring regulation does not hinder

the fair operation of the market.

Agenda

• A. Regulatory Team
• B. Captive Assessment
• C. Application
• D. Forms
• E. Q & A

Regulatory Team

Larry Knight

Assistant Insurance Commissioner

Lacosta Wix

Senior Counsel

Michael Corbett

Director – Captive Insurance

The Insurance Division

Financial Affairs Section – The Financial

Affairs Section regulates the financial and

• perational condition of captive companies. It is

comprised of examination, analysis and statistical oversight provided by: Mark Jaquish –

Financial Affairs Director

Horace Gaddis –

Chief Examiner

Robert Ribe –

Chief Analyst and Statistician

Captive Assessment

• Conduct a feasibility analysis to

determine if a captive insurance company is the right tool for the management of your company or group's risk.

• Select a captive management firm

that is authorized by the State of Tennessee.

Captive Assessment (continued)

• Arrange a meeting, including your

captive manager, with the Director and staff to discuss the proposed captive and obtain initial reactions from the department.

• In the case of association or risk

retention group captives, the Director will want to meet with key

• fficers prior to licensing. Risk

retention group captives must have a feasibility study for this meeting.

Application Process

Two-track process:

• 1. Prepare documents necessary for
• incorporation. The services of a local

lawyer may be desirable.

• 2. Prepare documents necessary for

application to the Department.

*Submit three copies of all materials. Include an application fee of $675.

Application

Application

 Submit Organizational Documents

(56-13-103(c) (1) (a))

 File Evidence of:

• Liquidity of assets
• Adequacy of management
• Soundness of plan of operation
• Adequacy of loss prevention programs
• Other factors determined by the

Department

Application (continued)

 Deposit with TDCI unimpaired

capital requirements (or letter of credit):

• Pure - $250,000
• Association - $500,000
• Industrial - $500,000
• RRG - $1,000,000
• Protected Cell - $500,000

Application (continued)

 Submit to the TDCI a description

• f coverage limits, rates and any

additional information required.

Application (continued)

Other requirements:

• Have your CPA complete the necessary form

for authorization to perform audits.

• Have your actuary complete the necessary

form for authorization to render opinions on reserves.

• The Department may perform an
• rganizational exam shortly after issuing the

Certificate of Authority.

Forms & Information

Forms & information available online

(www.captive.tn.gov)

• Application form
• Biographical affidavit
• Letter of credit form
• Approval forms for managers, actuaries & CPA

firms

• List of currently approved managers, actuaries

& CPAs

Panel Discussion:

Larry Knight - Assistant Insurance Commissioner Lacosta Wix - Senior Counsel

Question:

Why did the Department decide to update its captive law in the previous legislative session?

Question:

What was the legislative attitude toward captive legislation?

Question:

How will the Department of Commerce and Insurance carry out the Commissioner’s plan to make Tennessee an attractive domicile?

Question:

Initial meeting prior to submission of

• applications. What and whom should be

brought to this meeting?

Question

After meetings and submission of application, what should owners expect by way of process?

Comments, Questions & Suggestions

Tennessee Captive Insurance Association December 7, 2011

Tennessee Department

• f Commerce & Insurance

Captive Insurance Department