The State of Tennessee has announced the establishment of the Tennessee Captive Insurance Company to create additional efficiencies and savings when insuring state property.
In a press release, the Tennessee State Government said that implementing the Tennessee Captive Insurance Company will allow the State to operate with a high degree of efficiency as it works to insure property losses up to deductible limits, access the wholesale reinsurance markets to reduce premiums, minimize volatility in pricing, and underwrite the state’s unique risks.
Administered by the Tennessee Department of Treasury, Division of Claims and Risk Management, the State of Tennessee is self-insured for property and general liability.
All state-owned buildings and contents, including the campuses of Tennessee public institutions of higher learning, are covered, amassing to a total property value of $31.4bn as of July 2022.
The use of captive insurance will allow the State to better evaluate and control the risks of the Tennessee state government. The Division of Claims and Risk expects the captive insurance will help them insure difficult risks and reduce overall insurance costs.
Department of Commerce & Insurance Commissioner Carter Lawrence, said, “Commerce & Insurance has advocated for captive insurance as a smart business option to lower costs and increase specifically tailored protections.”
“Now that the State is establishing a captive insurance company, taxpayers will benefit from these same advantages.”
The Tennessee General Assembly recently enacted legislation permitting the State Treasurer, David H. Lillard, Jr., to create the state captive with the approval of the Tennessee Board of Claims.
“I thank the Tennessee General Assembly for giving our state the ability to operate in a fiscally smart manner,” Lillard said.
“The Tennessee Captive Insurance Company will save Tennessee taxpayers millions of dollars in the coming years. This is yet another way Tennessee works to keep taxes low for our citizens.”
The captive is governed by its Tennessee Captive Insurance Board, composed of Tennessee state officials, including the State Treasurer, the Commissioner of Human Resources, the Commissioner of Finance and Administration, the Comptroller of the Treasury, and the Secretary of State.
